AI Rewrites the Playbook for Reverse Logistics

As instrumentality rates stay elevated, margins compress and fraud tactics turn much sophisticated, retailers are being forced to rethink however reverse logistics fits into their broader concern strategy.

Retailers person agelong known that the outgo of a substandard returns strategy could vessel some profits and lawsuit retention rates. Consumers were expected to instrumentality astir $850 cardinal successful goods successful 2025, oregon 15.8 percent of the year’s projected retail income astatine the time, according to the 2025 Retail Returns Landscape study released by the National Retail Federation (NRF) and Happy Returns.

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On apical of that headwind, shoppers are getting picky and much demanding of a seamless returns process. Seventy-nine percent of online shoppers volition wantonness a acquisition if the instrumentality argumentation does not conscionable their expectations, says DHL eCommerce Trends Report.

To support margins and reconstruct control, retailers are progressively turning to artificial quality to usher decisions crossed the returns lifecycle.

At the NRF Rev 2026 league connected Jan. 11, Silicon Road Ventures’ laminitis and managing spouse Sid Mookerji identified 3 halfway pillars wherever AI tin optimize retail’s reverse logistics conundrums: fraud detection and prevention, predictive instrumentality forecasting and autonomous determination enactment connected what to bash with returned merchandise.

Although reverse logistics was erstwhile considered an afterthought astatine Target, according to elder manager of returns and recommerce Lindy O’Brien, the wide merchant has turned implicit a caller leafage from what she described arsenic a historically “one size fits all” returns strategy.

“Everything was treated equally, and we knew it shouldn’t be,” O’Brien said.

The retail elephantine uses algorithmic decision-making to measure each returned point connected its ain merits, incorporating seasonality, humanities demand, betterment rates and handling costs to find whether inventory should beryllium resold, donated, recycled oregon liquidated.

Store associates taking successful returned items tin travel simplified sorting instructions portion the strategy determines the optimal downstream path, improving their decision-making capabilities.

“We knew that successful the backmost country of our stores, we didn’t person country to bash a clump of sorts. We couldn’t inquire them to usage their labour successful a taxing way,” O’Brien said. “Every azygous day, our algorithm is reupping what our betterment looks like, and helping springiness back-room accusation to store squad members to benignant inventory successful a simple, binary way. That has made things seamless wrong of our 4 walls.”