Active Return Management for Online Retailer

High product return rates and their associated costs pose major challenges to online retailers. We investigate whether online retailers always benefit from active return management by ana-lysing the potential for profit improvements in diverse product categories, then comparing the suitability of nine return management strategies for realizing that potential. The analyses rely on an extensive data set from a large online retailer, including purchases by of over 166,000 customers over a five-year period. The authors confirm that retailers should focus their return management activities on managing customers, rather than products or some combination. Even the best return management strategy will not benefit every online retailer though: Some product categories stand to experience profit improvements of up to 330% from good active return management, but others will hardly benefit.