Return (Retoure)
A return is the sending back of already delivered goods from the customer to the seller – for example because of dissatisfaction, a wrong delivery or a defect. It triggers its own process: receiving and inspecting the returned goods, followed by a credit note, refund or exchange.
A return is the sending back of already delivered goods from the customer to the seller or shipper. It reverses the original flow of goods: what was previously shipped out as an order now comes back into the warehouse as an inbound return. Typical triggers are dissatisfaction, an incorrectly delivered or incorrectly ordered item, a defect, transport damage or the exercise of the statutory right of withdrawal in distance selling. Every return sets off its own workflow – from registration through physical receipt and inspection to financial settlement via credit note, refund or exchange.
The German term derives from the verb "retournieren" (to send back) and is firmly established in retail, mail order and especially e-commerce. A return is therefore more than a shipped-back parcel: it is a logistical and commercial process that touches stock levels, accounting and the customer relationship. In online retail it is part of everyday business – in individual segments such as fashion, a substantial share of the items shipped is sent back again. How quickly and cheaply a company processes returns therefore has a direct bearing on costs, product availability and customer satisfaction.
At a glance
- Sending back of already delivered goods from the customer to the seller (reversed flow of goods)
- Common reasons: dissatisfaction, wrong delivery, defect, transport damage, withdrawal
- Triggers receipt, inspection and financial settlement (credit note, refund, exchange)
- Also called a return shipment or goods return; part of returns logistics
- In the ERP interlinked with goods receipt, inventory management, order and accounting
What is a return – and how does it arise?
A return arises when a customer sends back a received delivery in whole or in part. The process always relates to goods that have already been shipped and therefore comes into play after the actual order and dispatch. The return shipment can concern individual line items of an order (partial return) or the complete delivery (full return). Commercially, it leads to an adjustment of the original transaction: the seller takes the goods back and refunds the purchase price, issues a credit note or delivers a replacement.
The reasons for returns can be broadly split into customer-side and seller-side causes. On the customer side, dissatisfaction, the wrong size, a selection order of several variants or simply a change of mind are typical. On the seller side, wrong deliveries, quality defects, transport damage or incomplete shipments come into play. This distinction matters because it determines responsibility for return shipping costs, the further use of the goods and possible process improvements in dispatch.
Withdrawal and warranty as legal triggers
In distance selling – that is, orders placed via an online shop, telephone or catalogue – consumers in the EU have a statutory right of withdrawal that allows a return without giving reasons. This must be distinguished from the warranty for defects, which applies when goods are faulty. Both cases practically result in a return, but differ in deadlines, cost responsibility and documentation. Many retailers also voluntarily grant more generous return rights as a service argument.
How does a return work?
The returns process usually begins with registration: the customer registers the return, receives a return label and a return slip that clearly assigns the shipment to an order. The goods are packed, handed over to the shipping service provider and arrive at the seller as a goods receipt. There, identification takes place via a return number or order reference, so it is clear which order is affected.
The core of the workflow is the inspection: is the returned item complete, unused and resalable? Depending on the result, the item is restocked as grade-A goods, sold as grade-B goods at a discount, refurbished, sent back to the supplier or disposed of. In parallel, the commercial settlement runs: the seller creates a credit note or refunds the amount; in the case of an exchange, a replacement delivery is triggered. Only once goods and money are posted is the return considered complete.
Why returns are so important economically
Returns cause direct costs – return postage, goods receipt, inspection, refurbishment, restocking and possible loss in value – which in total can eat up a considerable part of the margin. At the same time, returning items tie up capital and warehouse space and are unavailable during processing. A high return rate therefore directly weighs on profitability, especially in low-margin online retail.
Conversely, a smooth return is a strong selling point: customers are more likely to order if they can send items back easily. Companies thus operate in a field of tension between customer-friendly returns and cost control. The key lies less in making returns harder than in avoiding avoidable returns – for example through better product descriptions, precise size details, high-quality images and error-free picking that rules out wrong deliveries.
Return rate as a central metric
The return rate measures the share of returned goods in the shipping volume and can be calculated by quantity or by value. It is the most important steering figure in returns management: broken down by item, category, customer or return reason, it uncovers problem items and process errors. An item with a persistently high rate points, for example, to a misleading description or poor quality and can be specifically revised or delisted.
The return in the ERP system
In the ERP system, the return is mapped as its own document that references the original order and delivery. This keeps the entire history – order, dispatch, return, credit note – seamlessly traceable. From the return document, the system derives the goods receipt of the returning items, updates the stock and triggers the appropriate posting in accounting. Because the movement of goods and the flow of value come from a single data basis, stock levels and accounts always match.
The practical benefit lies in end-to-end continuity: during inspection, the returning item is assigned a condition that determines its further inventory handling – resalable goods flow automatically back into available stock, defective goods into blocked stock. Connected online shops and marketplaces receive the updated stock back via an interface, so that restocked items are immediately sellable again. Credit notes arise from the same process, eliminating manual rework and posting errors.
Returns portal and automation
Many systems connect to a returns portal through which customers register their return themselves. The reason, quantity and item are captured in a structured way and transferred directly into the ERP document. Rule sets automate the processing: standard returns are credited without intervention, while conspicuous cases – such as high amounts or wear – are routed out for manual inspection. This speeds up processing and at the same time delivers clean data for returns analysis.
Distinction: return, complaint and cancellation
Return, complaint and cancellation are often mixed up in everyday use, but denote different things. A return is the physical sending back of already delivered goods, regardless of the reason. A complaint is the objection to a defect: it can lead to a return, but need not – for example if the seller grants a price reduction and the goods stay with the customer. A cancellation, in turn, voids an order before or without goods returning; if nothing has yet been shipped, no return arises at all.
The return as an individual event must also be distinguished from returns management as an overarching discipline: it organises the totality of all return shipments, their processes, metrics and avoidance strategies. The return is the concrete case, returns management the governing framework. Within logistics, the reverse movement is part of returns logistics – the counterpart to outbound fulfillment and a building block of the broader circular and disposal logistics.
Example
Example: fashion retailer cuts costs through structured returns
A mid-sized online clothing retailer records a return rate of over 40 percent in the shoes size category – many customers order two sizes and send one back. Initially, returns were processed manually: parcels piled up at goods receipt, assigning them to the order took time, credit notes were created by hand, and restocked items were unsellable for days.
The retailer introduced a returns portal and connected it to its ERP. Customers now register their return themselves and select a reason; the system automatically generates the label and return document with an order reference. At goods receipt, staff scan the return number, check the condition and post the goods directly into available or blocked stock. Resalable items are available to the shop again within hours, and credit notes arise automatically. The analysis of return reasons also uncovered a shoe with a systematically wrong size label, which came back far less often after the product data was corrected.
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