Smarter International Returns: How to Protect Margins and Build Customer Trust 

Returns are an inevitable part of ecommerce but they’re especially complex when crossing borders. Between shipping costs, customs requirements, and varying local expectations, international returns can quickly turn into a margin-killer if not handled strategically. 

 But here’s the upside: when managed well, international returns can actually protect your margins and build loyalty at the same time. The key is understanding where returns break down and building a strategy that works across regions. 

How to Decide If Accepting the Return Is Worth It 

Did you know? Juniper Research predicts that over $3.3 trillion in cross border ecommerce transactions will be conducted in 2028—a whopping 107% increase compared to 2023.  

Not to mention, Q1 2024 saw an 84% return to stock rate, according to the TwoBoxes Benchmark Report, meaning 84% of returned items were in good enough condition to be resold. 

That means you want to get your products back as soon as possible because there’s a major downstream impact to managing returns effectively. 

While this growth opens huge opportunities, it also comes with its fair share of challenges—especially when it comes to managing international returns. 

In other words… Not all returns are worth taking back. 

Before approving a return, evaluate: 

• Shipping costs: Calculate the costs of shipping, duties, and taxes to get the item back. 

• Resale value: Determine if the returned item has enough value to make reselling worthwhile. 

• Return criteria: Establish clear criteria for what’s worth accepting. For instance, is the product in resellable condition, or should you offer the customer an exchange instead? 

Alternative Options 

• Keep the item: For some low-value items, it may make sense for the customer to keep the original product, especially if the cost of returning it outweighs its resale value. 

• Localized returns: When feasible, process returns locally through a 3PL to avoid shipping items internationally. 

But managing localized returns can be difficult due to varying 3PL contracts, pricing, and tech stacks across regions, so if you can’t take this on right now, let’s discuss some additional tips. 

5 Tips for managing international returns 

If your team decides the return is worth it, you need to focus on ease of use, transparency, and efficiency to reduce friction for both the consumer and your team. 

Here are some essential tips to help you handle the influx of post-peak international returns without losing your margins: 

Get upfront shipping rates for returns 

Many merchants underestimate the complexity of international return shipping costs. Factors like destination, weight, and customs can significantly impact pricing. By knowing these rates upfront, you can plan better, avoid surprises, and set clear expectations with customers. 

And here’s a surprising twist: charging for returns doesn’t drive customers away. According to Loop Returns, 63% of merchants now charge return fees. After six months of analysis, those merchants saw their return rate hold steady at 10%, with no dip in their repeat purchase rate (sitting at 48%). 

Use DDP shipping to make returns more secure 

Pre-paying duties and taxes with Delivered Duty Paid (DDP) shipping makes international returns less of a headache. It’s the smarter alternative to DDU (Delivered Duty Unpaid), which leaves merchants vulnerable to costly surprises. 

With Delivered Duty Unpaid (DDU), merchants often face: 

• Abandoned packages that lead to restocking and reshipping costs. 

• The need to dispose of goods when return shipping becomes prohibitively expensive. 

And here’s why DDP is the clear winner: 

• Avoid order rejections: Surprise costs often lead customers to refuse delivery, leaving you with expensive returns or destroyed goods. 

• Streamline refunds: With duties and taxes prepaid, you can process customer refunds faster. 

• Protect your bottom line: By eliminating unexpected fees, you safeguard your profit margins and avoid taking a hit from unclaimed goods. 

When your costs are predictable, your margins are safe. It’s a win-win for both you and your customers. 

Mitigate fraud 

Fraudulent returns are a growing challenge, especially for international ecommerce merchants. With the rise of “wardrobing” (buying items with the intent to return after a single use), false claims, and manipulated return policies, merchants are left with significant financial and operational losses. 

So how can you prevent it? 

1. Clear and transparent return policies 

1. Clearly outline the acceptable condition for returned items, including requirements like tags being attached, no visible signs of wear, and unopened packaging for consumables or electronics. 

1. State that items showing excessive wear or damage will be denied refunds or exchanges. 

1. Delayed refunds until inspection 

1. Avoid processing refunds as soon as the carrier scans the return label. Instead, issue refunds only after the item has been inspected and verified to meet your return criteria. 

1. Monitor high-risk behaviors 

1. Flag frequent returners or customers with unusual return patterns for review. For example, customers who repeatedly return high-value items or file claims for damaged goods may require closer scrutiny. 

Assess regional challenges 

Returns aren’t one-size-fits-all. Each region has its quirks and requirements, which can make or break your return process. 

For example, some countries require “returned goods” declarations, which must be properly filled out to avoid additional fees. Incorrect documentation can lead to weeks-long delays or even confiscation of goods. 

Here’s how to stay ahead of the game: 

• Understand customs requirements: Some countries require specific labels or declarations for returned goods.  

• Plan for extended return windows: Global shipping times vary significantly—returns from remote areas often take longer. Offering region-specific return policies (e.g., 60 days for international customers vs. 30 days for domestic) can prevent negative reviews and improve customer loyalty. 

The takeaway? A little extra planning now can save you a lot of frustration (and lost revenue) later.  

Offload manual processes to the right partners 

Let’s face it—managing international returns manually is a nightmare. Manually managing international returns can lead to errors, missed refunds, and poor customer experiences.  

For example: 

• Lost labels due to incorrect inputs. 

• Delays in tracking updates. 

• Inability to match returns with their original orders. 

But the good news is, you don’t have to. Tools like Loop Returns and FlavorCloud take the heavy lifting off your plate, making the process smoother and more efficient. 

• Loop Returns’ dynamic routing: Automatically finds the most sustainable and cost-effective path for each return, based on factors like shipping fees and product condition. 

• FlavorCloud’s expertise: Handles the complexities of customs documentation and international regulations, so you don’t have to become an expert in global logistics. 

Together, these tools ensure your returns are processed quickly, sustainably, and with minimal hassle. 

Analyze return data for trends 

Returns season isn’t just about logistics—it’s a goldmine of insights. Digging into your return data can reveal patterns that help you make smarter business decisions, from improving product quality to refining marketing strategies. 

But how do you find these actionable insights? 

• Review your disposition logic: Take a close look at your brand’s Standard Operating Procedures (SOP) or inspection criteria. Ensure your processes capture accurate data about the condition of returned items. This not only streamlines processing but also gives you the right information to work with when evaluating trends. 

• Use historical data: Look back at your past return trends to uncover what the data might be telling you. Are certain products consistently returned? Are there regional or customer-specific trends that stand out? Use this information to make predictions for the upcoming year and proactively address potential issues. 

Here are some key insights to look for: 

• Return reasons: Are customers struggling with sizing, or is product quality an issue? Use this data to adjust product descriptions or improve quality control processes. 

• Product patterns: Identify which items have the highest return rates and why. For example, apparel brands might discover that customers are unhappy with fit consistency, while electronics brands may face issues with missing accessories. 

With the right data, you can turn returns into an opportunity to improve your products and customer experience. 

Get your stuff back faster (and easier) with FlavorCloud 

International returns don’t have to be a liability. With the right strategy, they can become a source of valuable insight and even strengthen customer trust. Whether it’s refining your return policy, shifting to DDP, or analyzing patterns to reduce return volume, every step toward a smoother process pays dividends in margin protection and brand loyalty. 

If your team is ready to build a smarter approach to international returns, start by evaluating your current return flow and identifying where better clarity, automation, or controls could make a difference. 

FlavorCloud and Loop Returns are partnering to make international returns simple, scalable, and stress-free—no matter where your customers are. From automated customs compliance to intelligent return routing, we’ve got the hard parts covered. Talk to our team of experts to streamline your global returns strategy.