What to Do With Customer Returns: A Practical Guide for UK Retailers

By the Sell Your Inventory team, Surplus Solutions Group · 7 min read

Returns are part of selling, especially online. Shoppers order two sizes and send one back, change their minds, or receive something that doesn't quite match what they expected. For many retailers, returns aren't a small side issue. They're a steady flow of stock that needs somewhere to go.

The problem is that returns are expensive to handle and easy to ignore. They end up in a cage in the corner of the warehouse, waiting for someone to have time, losing value every week. This guide sets out a simple way to decide what to do with each return, so you recover more and keep your warehouse clear.

Why customer returns cost more than you think

The refund is only the first cost. Every return also needs handling:

• Receiving and checking: someone has to open it, inspect it and decide what to do with it.
• Repacking: items often need new packaging or labels before they can be resold.
• Storage: returns waiting to be processed take up space you need for sellable stock.
• Falling value: products date and packaging gets damaged the longer they wait.

For a high-value item, that handling is worth it. For a low-cost one, it often costs more than the item is worth. That's why a clear process matters.

Your legal obligations, briefly

In the UK, customers who buy online usually have the right to cancel and return goods within 14 days of receiving them under the Consumer Contracts Regulations, even if nothing is wrong. Separately, under the Consumer Rights Act, customers can usually reject faulty goods within 30 days for a full refund. Many retailers also offer longer returns windows as a goodwill policy.

These rules decide when you have to accept returns. They don't dictate what you do with the items once they're back. This is general information, not legal advice, so check GOV.UK or a legal adviser for your own situation.

Step 1: Grade every return quickly

The sooner a return is checked, the more it's worth. A simple grading system makes decisions fast and consistent:

Keep grading simple. Two or three people grading the same item should come to the same answer.

Step 2: Choose a route for each grade

1. Restock and resell

Like-new items should go straight back into sellable stock. This is where you recover the most value, so prioritise checking higher-value items first.

2. Refurbish or repack

Some items just need cleaning, a new box or a missing part. It's only worth doing if the resale price comfortably covers the time and materials.

3. Return to the supplier

Faulty items, and anything covered by a supplier returns agreement, should go back to the manufacturer or supplier for credit.

4. Sell in bulk to a stock buyer

For B and C grade stock, unsorted backlogs, or low-value items that aren't worth processing one by one, selling in bulk is often the most efficient option. A stock buyer makes one offer for the load, collects it and pays you. You can sell your customer returns to us as a one-off clearance or on a regular schedule.

5. Recycle responsibly

Items that are broken beyond repair or can't legally be resold should be recycled properly. Electricals, for example, need to be handled under WEEE rules.

When to sell returns in bulk instead of processing them

Bulk selling usually makes more sense than processing returns individually when:

• The average value per item is low.
• Your backlog is growing faster than your team can process it.
• You need the space for incoming stock, especially before peak season.
• Most returns are B or C grade rather than like new.
• You don't have the setup to resell open-box items yourself.

Many retailers do both: they restock the like-new returns and sell everything else in bulk, so nothing sits around.

How to reduce returns in the first place

You can't eliminate returns, but you can cut the avoidable ones:

• Improve product descriptions and photos so customers know exactly what they're getting.
• Add clear size guides and measurements for clothing and furniture.
• Read your return reasons. If one product keeps coming back for the same reason, fix the listing or the product.
• Package items properly to reduce damage in transit.
• Show genuine reviews so customers can set realistic expectations.

What about Amazon returns?

If you sell through Amazon FBA, returned items either go back into sellable inventory or are marked unfulfillable. Unfulfillable units keep costing storage fees until you remove them, liquidate them or have them disposed of. Our guide comparing Amazon FBA Liquidations with selling to a liquidator explains your options in detail.

Frequently asked questions