Tariffs are throwing a wrench into sourcing, planning, and profitability. One of the most overlooked tools in your playbook? Returns.
Retailers are bracing for impact as talk of sweeping import tariffs ramps up. The uncertainty alone is enough to stall decision-making. Rising costs, delayed shipments, and unpredictable availability of inventory only add to the pressure. For most brands, it is not just theoretical. It is immediate. It is messy. And it is rewriting the rules on inventory management and margin planning.
While many scramble to adjust future orders or rework supply chain relationships, there is one asset hiding in plain sight: your returns.
Most brands already restock a significant portion of their returned inventory. But there is often more value to recover, both by improving restock rates and by finding smarter ways to resell second-quality goods that cannot go back to full-price shelves.
Returns are no longer just a logistical problem to solve. With the right strategy, they can re-enter the market, protect margins against rising costs, and even strengthen the customer experience.
Returns Can be a Sunk Cost, Until You Turn Them Around
Returned inventory isn’t new. But in the face of external disruption, it becomes newly strategic. Most brands treat second-quality returns as a loss, issuing refunds and writing off the goods or liquidating them at a steep discount. That’s a short-term fix that can have a long term expense.
Now Is the Time to Rethink Your Returns Strategy
Not all returns are the same. Treating them as one-size-fits-all leaves money on the table.
Let’s break it down:
Returns Strategy #1: Increase Your Restock Rate
Most brands already restock returned goods when they can. But the opportunity is in doing it better. In categories like apparel and footwear, typical restock rates hover between 50% and 70%. Even a modest improvement of just 5% can drive meaningful gains in margin recovery.
Maximizing restock potential starts with tighter operational alignment and more strategic vendor selection.
That means:
- Working closely with your returns partner to ensure products are cleaned, repaired, and re-tagged in a way that meets restock standards.
- Auditing your internal criteria to avoid over-classifying items as unsellable when they are still in great condition.
- Evaluating fulfillment and reverse logistics providers based on their ability to maximize recovery, not just speed or volume.
When brands approach restocks as a lever for profitability not just a function of operations the impact adds up quickly.
This strategy does not require any new sales channels. It is about doing more with what you already have.
Returns Strategy #2: Resell Second-Quality Inventory
Even with strong restock processes, not every item can make it back to full-price shelves. Some products come back with slight imperfections or signs of wear that prevent them from being sold as new. But that does not mean they have lost their value.
These items are already paid for. They are already here, sitting in warehouses or heading back to your 3PL. With the right resale strategy, they can re-enter the market, protect margins against rising costs, and keep customers engaged.
Rather than liquidating second-quality returns at a steep discount, more brands are rerouting them into branded resale programs. This creates a new revenue stream from products that would otherwise be written off.
What that looks like:
- Products are inspected, lightly refurbished if needed, and sold as “second quality” or “pre-loved” through a branded resale storefront.
- The margin per unit is significantly higher than liquidation or wholesale dumping.
- Customers looking for lower price points, especially during inflationary periods, get a compelling option without eroding your brand integrity.
Resale allows brands to meet demand for affordability and sustainability, while creating a healthier margin profile across all inventory grades.
Returns Feed a More Resilient Supply Chain
Inventory planning in 2025 feels like solving a puzzle with missing pieces. Brands are doing their best to forecast demand—but when shipping timelines stretch and tariffs layer in additional cost and risk, even the best-laid plans fall apart.
Second-quality returns, especially when rerouted into resale, give you a reliable, domestic source of inventory.
They’re not dependent on overseas logistics. They’re not stuck on a container ship. They don’t require you to renegotiate supplier contracts under duress. They’re here. And they’re ready to be listed, photographed, and sold.
Some of the most forward-thinking brands are even shifting their returns processing to domestic facilities and building dedicated resale workflows around them with companies like Fillogic and Retail Reworks, who specialize in handling these reverse-logistic workflows. The outcome? A tighter loop, less waste, and a buffer against supply volatility.
It’s Not Just About Margins. It’s About Loyalty.
Returns are often where customer loyalty dies: long waits, confusing processes, or credit that’s hard to redeem. But when you pair returns with resale, the whole experience shifts.
A few examples:
- Customers who discover second-quality items at a lower price point often return to buy full-price items later.
- Shoppers who have a positive experience buying "pre-loved" products are more likely to view the brand as accessible, sustainable, and trustworthy.
- A branded resale storefront creates an ongoing relationship with customers who may not have purchased at full price initially but stay engaged through multiple transactions.
Instead of a churn point, returns become a re-engagement tool. They create price-accessible entry points that appeal to Gen Z and Millennial shoppers who are already attuned to sustainability and circular shopping habits.
Optimizing Returns Make Financial Sense, With the Right Setup
The economics of resale start to work when returns aren’t just sitting in storage. The key is having a simple way to relist and resell them.
Treet helps brands manage that process. We provide the software to run your resale channel—listings, payouts, and integration with your site—so it’s easy to bring returned inventory back to market.
If you need help with the physical side, like intake or fulfillment, we can point you to logistics partners that other brands are already using.
Optimizing returns doesn’t have to be a complete overhaul, but rather making more effective use of what is already available.
The Bottom Line
Returns are already in your system. You’ve paid for them, processed them, and stored them. The only question is whether you let them sit or put them to work.
In a world where tariffs, shipping costs, and customer expectations are all moving targets, returns offer something rare: control. With the right resale infrastructure they become a strategic asset that strengthens your margins, your supply chain, and your relationship with your customers.
Looking to make returns part of your resale strategy? Let’s talk.
