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A new survey finds retailers still struggling with the extra costs and new workloads created by processing in-store returns while barely benefiting from returnees making an add-on purchase.
The survey of retail executives and store managers, conducted between December 2024 and January 2025 by Retail Systems Research and commissioned by mobile POS developer Jumpmind, found that 43% cited processing online returns in-store as a top challenge, with rising return volumes driving up costs.
More than one in five say their stores were not designed for omnichannel’s advanced customer service functions (order pickup, online returns, etc.), with 41% believing omnichannel fulfillment and returns require new in-store sales rep roles and workflows.
At the same time, the survey found that while 72% of retailers believe this creates opportunities to drive new sales, only 17% of shoppers end up spending more money following a return in-store. The majority — 43% — simply return the item and walk out.
“Those retailers whose returns processes have not been overhauled since their (likely) creation during the pandemic are particularly challenged, as the processes they cobbled together in a hurry are not fit for today’s scale of returns,” said Steve Rowen, managing partner at RSR.
BORIS (buy online, return in-store) promises retailers some benefits, including supporting an easy method for consumers to return merchandise. Once in the store, consumers often make an impulse purchase or can be incentivized to do so.
However, retailers are grappling with higher overall return rates driven by e-commerce growth, as online purchases tend to result in more returns. At the same time, in-store returns are rising as retailers promote free drop-off options while adding fees for mailed returns.
A 2023 study by academic researchers in the UK concluded that returns from online sales — particularly those made in-store — are eroding profitability and urged retailers to adopt a strategic approach to treating returns as a potential profit center. Recommendations included expanding physical storage space, hiring more staff, and investing in IT systems to better track and manage returns.
The study stated, “Many businesses have complex procedures for managing returns. With little senior management oversight of the returns process, retailers find it difficult to pin down crucial information such as the rate of return and the costs of handling a returned item.”
A Shopify blog entry noted that BORIS can lead to inaccurate inventory data, as returned items sit in stockrooms, as well as in-store congestion and longer lines. Shopify suggested creating designated areas for handling in-store returns, although the standard checkout processes returns in many stores.
In March, Kohl’s temporarily stopped accepting Amazon returns at some stores in a test, following social media complaints from store associates about the added workload — from lifting heavy boxes and finding storage space for returned items to managing long customer lines. Several associates also indicated that customers returning Amazon packages rarely take advantage of the 25%-off Kohl’s coupon they receive as an incentive.