In this article, learn about:
- Why apparel returns stay high no matter how well a brand operates
- The path a returned garment takes after it leaves the customer
- What a return costs, and which parts of that cost land on the supplier
A customer orders a dress in two sizes, keeps one, and ships the other back. For the brand that made the dress, that single decision starts a second supply chain running in reverse. The garment travels to a returns center, gets inspected, and gets sorted into a disposition category. Somewhere in that process, part of the cost lands on the supplier as a return-to-vendor charge, a defective claim, or a deduction on a remittance.
Most returns coverage is written for retailers and shoppers. This article follows the reverse flow from the supplier’s seat: what drives the volume, where the garment goes, what it costs, and which parts of the process a brand can change.
Why Are Apparel Returns So High?
Clothing is the category people buy without knowing whether it will fit. That fact sets a floor under apparel return rates, and no amount of operational discipline removes it.
The scale is documented. NRF and Happy Returns project $849.9 billion in total U.S. returns for 2025, with 19.3 percent of online sales coming back and retailers estimating that 15.8 percent of all annual sales will be returned. Online return rates across categories run roughly 19 to 20 percent, against 5 to 9 percent for store purchases, and clothing sits at the top of the category list.
Shopping habits raise the floor further. Roughly six in ten shoppers buy more than one size and send back what does not fit, a practice the industry calls bracketing. Wardrobing is wearing an item once and returning it. NRF also reports that 82 percent of consumers weigh free returns when they shop online, and that shoppers aged 18 to 30 average 7.7 online returns a year.
Structural, Not a Service Failure
Those numbers describe how people shop for clothes at a distance. They do not describe a problem a service team solves once and closes. Planning for a high baseline is a different job from trying to end it, and the brands that plan for it price and forecast better.
Related Reading: An Introduction to the Fashion, Apparel, & Footwear Category
How Does Reverse Logistics in Apparel Work?
Reverse logistics covers the steps that move a product back up the supply chain after a customer gives it up. In apparel, the flow runs in three stages.
Reverse Logistics Apparel Stages, From Doorstep to Disposition
Initiation: The customer starts the return through the retailer, then drops the item at a store, a carrier location, or a third-party return point.
Inspection: The item reaches a returns center or a store, where staff check its condition, its tags, and whether it matches what the label and the order say.
Disposition: Someone decides where the garment goes next. The options sit in rough order of value recovered:
- Restock and resell at full price
- Restock and resell at a markdown
- Sell into off-price or liquidation channels
- Send to salvage or recycling
- Donate
- Destroy
Most coverage assumes the first option, but many returned items never reach a shelf again. Returns also created an estimated 8.4 billion pounds of landfill waste in 2023, according to returns-technology firm Optoro.
The destruction branch is narrowing in Europe. The European Commission adopted rules under the Ecodesign for Sustainable Products Regulation that ban the destruction of unsold apparel, clothing accessories, and footwear. The ban applies to large companies from 19 July 2026, and medium-sized companies follow in 2030. Destruction is allowed only in narrow cases, and it comes with disclosure and record-keeping duties.
What Does a Return Actually Cost?
Processing a return costs an average of 30% of the item’s original price, according to Optoro figures reported by CNBC. That covers handling, before any loss on disposition. A garment restocked at a markdown loses margin twice, once in the processing and again in the price.
Who Pays for Reverse Logistics in the Apparel Industry?
The responsibility depends on the vendor agreement. Retailers carry the customer-facing cost of return shipping and processing. Suppliers carry a share that arrives later, and in a different form. It shows up as return-to-vendor charges for goods the retailer ships back, defective allowances set as a percent of sales, and returns-processing fees taken out of payment.
Terms vary by retailer, so the useful question for a brand is not what a standard agreement looks like. It is which of these charges show up on its own remittances, and at what rate.
Which Returns Deductions Should Suppliers Audit?
Returns reach a supplier as money events. They arrive in the same place chargebacks do, on the remittance, coded and netted out of payment before the brand sees the cash.
Suppliers with the clearest view of these charges treat them as a category instead of as noise. The work has three parts: finding which deduction codes relate to returns, sorting them by cause, and checking each one against its paperwork. Most deductions are legitimate. Some come from clerical errors, duplicate claims, or terms applied wrong, and the only way to tell them apart is to look at each one. Brands doing this at volume use deduction-management software rather than spreadsheets. SPS Revenue Recovery is an SPS Commerce product in that category.
Return and return-to-vendor (RTV) data also works as a quality signal. A style that comes back at twice the rate of its neighbors is saying something about its fit, its construction, or the accuracy of its product page, often before the sell-through data does.
Why Are Retailers Tightening Return Policies?
The free-returns era is ending, and retailers name cost as the reason. Mail-return fees are now the norm across apparel.
Retailer | Mail return fee | Note |
T.J. Maxx and Marshalls | $11.99 | Avoided by returning in store |
Macy’s | $9.99 | Waived for Star Rewards members |
J.Crew | $7.50 | Deducted from the refund |
Abercrombie & Fitch | $7.00 | Deducted from the refund |
Zara | $4.95 | Deducted from the refund |
H&M | $3.99 | Deducted from the refund |
Fees are just one lever. Retailers are also cutting return windows, setting limits on single accounts, and refunding without a return.
REI stopped accepting returns from a small group of members averaging a 79 percent return rate, fewer than 0.02 percent of its membership. ASOS applied a 3.95 pound fee to frequent returners who keep less than 40 pounds of an order. Amazon ended its Try Before You Buy program on January 31, citing the program’s limited reach and shoppers moving to virtual try-on and size recommendations.
At the other end, some retailers refund without asking for the item back. A $20 shirt can cost $30 to recover, which makes a returnless refund cheaper than the alternative. Walmart extended the option to sellers on its marketplace, and Target uses it in a small number of cases.
For a supplier, these are operational signals rather than consumer news. A fee change moves return volume, timing, and channel mix. Each of those shifts shows up later in the RTV and deduction pattern.
How Can Suppliers Prevent Avoidable Returns?
Prevention happens upstream, in data the brand already owns.
Prevention Lever | Return type it reduces |
Fit returns | |
Not-as-expected returns | |
Consistent identifiers and labeling across channels | Wrong-item and receiving errors |
Quality control at the factory and on inbound goods | Defective returns and RTVs |
Every lever in that table depends on item data. The data has to be right, and it has to match in every place it lands: the retailer’s item setup, the brand’s own site, and each marketplace listing. Suppliers keep that data lined up with EDI and item-management systems, including SPS Fulfillment. Clean item data is needed for this work, but it is not enough on its own.
Brands that do this well do not report low return rates. They report fewer avoidable returns and a lower cost per return. That is the part of the number a supplier controls.
Frequently Asked Questions
What Is Reverse Logistics in Apparel?
Reverse logistics in apparel is the process that moves a garment backward through the supply chain after a customer returns it. It covers initiation, inspection, and the disposition decision that sends the item to resale, liquidation, donation, recycling, or destruction.
How Much of Apparel Sales Comes Back as Returns?
NRF projects that 19.3 percent of online sales across retail will be returned in 2025, with clothing among the highest categories. Online rates run roughly two to three times store rates.
What Is an RTV?
A return to vendor, or RTV, is a charge or a shipment that sends returned or unsellable goods, or their cost, back to the supplier. Terms differ by retailer and are set in the vendor agreement.
Do Returns Show Up as Deductions?
Often, yes. Returns-related charges appear on remittances as deduction codes, netted out of payment. Suppliers that track them separate the returns codes from other chargebacks and check each one against supporting documentation.
Want to Go Deeper on Returns and Deductions?
Returns are one of many retailer rules that move money in both directions. The Supply Chain Source has more for apparel brands on scorecards, deductions, and the item data behind them.