Cutting Costs: AI in Retail Returns Management

It’s no secret that retail returns are a growing nightmare. Whether it’s the wrong size, wrong color, or just plain buyer’s remorse returns are a fact of modern e-commerce. In 2025, however, returns management AI is doing more than just damage control. It’s transforming the entire returns lifecycle into an opportunity for savings, loyalty, and sustainability.

From predictive insights to automation and seamless experiences, AI is helping retailers move past reactive solutions. Glance AI is playing a vital role here—bringing intelligent, real-time prompts and personalized suggestions to users even before a return is initiated. That kind of proactive intelligence reduces unnecessary returns and improves satisfaction. Let’s break down how AI is quietly becoming the MVP of returns.

Why Retail Returns Are a Major Problem in 2025

We’re shopping more online than ever, but that convenience comes at a steep cost. In the U.S. alone, retail returns topped $248 billion in 2023. By 2025, with higher order volumes and rising customer expectations, those figures are trending even higher. E-commerce has an average return rate of 26.4%—more than double the 10% in-store rate.

Why so many returns?

• Sizing inconsistencies
• Misleading images or descriptions
• Impulse purchases made during sales or promotions
• Lack of try-before-you-buy features

These issues not only cost retailers money—they frustrate shoppers. Enter: returns management AI.

How Returns Management AI Fixes the Chaos

Returns management AI isn’t just about scanning barcodes faster. It’s a full-stack solution combining machine learning, automation, predictive modeling, and customer behavior analysis to completely rewire how returns are handled.

1. Predictive Analytics and Pattern Recognition

By studying historical returns data, shopping behavior, and product performance, AI can:

• Predict which items are most likely to be returned
• Flag high-risk customers (e.g., serial returners)
• Identify product categories with unusually high return rates
• Help reduce overstock of poor-performing SKUs

This empowers brands to tweak product listings, modify marketing tactics, and reduce avoidable returns before they even happen.

2. Smart Return Routing and Cost Optimization

Not every return needs to be shipped back across the country. AI evaluates location, product condition, return value, and environmental impact to decide:

• Whether to issue a returnless refund
• Where to send the item for restocking or donation
• If local return hubs or pop-ups are more efficient

Retailers like Walmart and Amazon are already leveraging smart routing to reduce unnecessary shipping. It’s cheaper, greener, and faster.

3. AI-Powered Customer Experiences

Glance AI brings a whole new layer of intelligence to this by analyzing real-time user behavior and nudging shoppers toward smarter decisions:

• Trying on AR filters on the lock screen to check fit before purchase
• Displaying accurate product reviews or sizing charts based on the user’s profile
• Suggesting exchange options proactively before a return is finalized

These tiny nudges go a long way in minimizing regret purchases. AI in retail isn’t just solving post-sale problems; it’s preventing them altogether.

Returns Management AI in Action: Real Brand Examples

Let’s spotlight some brands crushing it with returns automation:

• Zappos uses AI to analyze fit feedback and tweak sizing recommendations dynamically.
• ASOS integrates AI to identify high-risk returners and adjust promotional visibility accordingly.
• Best Buy applies AI to fraud detection in returns, flagging suspicious refund patterns instantly.
• Sephora uses Glance-powered AI previews to reduce cosmetic returns, letting users virtually try on products.

These brands aren’t just reducing returns—they’re building loyalty by offering smoother, more confident shopping experiences.

The Bottom Line: Real Business Benefits

Here’s why returns management AI is catching fire in 2025:

Benefit

Impact

Lower operational costs

AI replaces manual labor, reduces error, and accelerates processing

Improved inventory flow

Returns are reintegrated into stock faster and smarter

Higher customer satisfaction

Faster refunds and personalized options keep customers happy

Reduced return volume

Smarter sizing, visual previews, and tailored recommendations

Sustainability gains

AI chooses eco-friendlier options like localized returns or no-return refunds

And these benefits build on each other. When AI reduces waste, the customer wins. When the customer wins, so does your bottom line.

Where Glance AI Fits into the Returns Puzzle

Glance AI doesn’t just help customers shop smarter—it helps them return smarter, too. For example:

• It displays contextual information on your lock screen based on browsing behavior.
• If a customer looks at the same shirt in multiple sizes, Glance AI can surface reviews related to fit—right when they’re most needed.
• Post-purchase, Glance nudges users toward “Need help with this?” or “Thinking of exchanging?” before they initiate a full return.

Returns management AI gets even more effective when it’s part of the discovery phase, and Glance brings that power straight to the lock screen—making the decision-making process proactive instead of reactive.

Future Trends: What’s Coming Next?

1. AR + AI for Pre-Purchase Assurance

As virtual try-ons get more realistic, returns will naturally drop. AI ensures that AR results are accurate for different lighting, body types, and angles.

2. Conversational Returns

Expect to see chatbots managing returns in real time: “Hi, would you like to return or exchange your item?” They’ll handle labeling, scheduling pickups, and even offering last-minute discounts to keep the product.

3. Blockchain + AI Integration

To add transparency and trust, blockchain could verify return authenticity, while AI tracks patterns to refine future policies.

4. Agentic AI

Self-learning systems will start recommending changes to return policies, predicting inventory shortages due to high-return items, and helping warehouse teams re-prioritize returns stock automatically.

5. Emotion-Based Returns Triage

AI could soon evaluate the tone of emails or chat interactions to prioritize unhappy customers first—preventing escalation and preserving brand loyalty.

And yes, Glance is already toying with these ideas. Combining AR try-ons with instant post-purchase recommendations creates a continuous loop of smart engagement—from glance to cart to keep.

Challenges Still on the Table

Returns management AI is powerful, but not perfect. Brands must:

• Integrate data across all platforms to avoid siloed blind spots
• Educate customers on AI-powered return options like returnless refunds
• Stay transparent about which decisions are automated and why
• Keep a human touch where it matters—especially with high-value returns or loyal customers

Balancing automation with empathy is key.

Final Thoughts: Smarter Returns Start at the Source

In today’s retail world, the best return is the one that never happens. Returns management AI isn’t just cutting costs—it’s reshaping the entire retail experience. And platforms like Glance AI are showing how early, intelligent nudges can keep both shoppers and sellers happy from start to finish.

Ready to make returns less painful? Try Glance AI on your lock screen and start shopping (and returning) smarter.