Outsourced Returns Processing: When Doing It Yourself Stops Making Sense

When returns outgrow your in-house fixes

Most brands begin with the same belief. Returns are manageable. Someone in the office can handle them between meetings. A small team can sort through the boxes when they have time. A spreadsheet can track everything. Then order volume grows, channels multiply, and one day the pile of returns has a gravity all its own. Refunds slow down. Boxes stack up. Inventory accuracy slips. Your team spends more time untangling returns than shipping new orders. That is when outsourced returns processing stops feeling optional and starts feeling like the only rational move.

Returns do not scale the same way outbound orders do. Outbound is predictable. Returns are not. They come back used, unused, mislabeled, mixed, or damaged. They come back from customers, from retailers, from marketplaces, and from carriers that mishandled something along the way. Every box is a question mark. In-house teams eventually hit a ceiling, not because they are incapable, but because the workflow itself demands specialized tools and dedicated people.

Why in-house returns start breaking your business

In-house returns handling begins to crack for two reasons: subjectivity and volume. When your team is small, one or two people make consistent decisions. Once that team grows or turns over, consistency disappears. Ten people can make ten different calls on the same item.

Connor Perkins, Director of Fulfillment at G10, sees that every day. "Returns can be tricky," he said. "A good example is apparel, there are times where people order something online, try it on, wear it once, and then want to return it. When that comes back, if the client decides to refund, we have to do our due diligence." He added, "Returns involve a lot of subjectivity." Subjectivity is workable in small batches. In volume, it becomes chaos.

And then there is the cost of time. Every box your team opens is time not spent on outbound orders, customer experience improvements, inventory planning, or channel expansion. Returns steal focus from growth.

The invisible costs of DIY returns processing

Most brands underestimate the real cost of keeping returns in-house. Labor hours are the obvious expense, but the hidden ones are worse. Unprocessed returns create inventory blind spots. Your system shows zero when you actually have five units sitting in a cart, uninspected. Bad data leads to overselling, stockouts, and unnecessary purchase orders.

Connor hears the same story from nearly every merchant arriving at G10 after struggling elsewhere. "One of the pain points our clients have experienced with previous 3PLs is inventory accuracy; maybe their previous 3PL was not great at picking the orders accurately. So they were losing money by shipping wrong items or wrong quantities of items." That same lack of discipline shows up in returns. Without consistent scanning and structured workflows, returns become a black hole for inventory integrity.

Customer experience suffers too. Slow returns mean slow refunds. Slow refunds mean more support tickets. More support tickets mean you hire more people to answer questions that should not exist in the first place. It is a tax on your brand.

Why outsourced returns processing beats software alone

When returns start hurting, many brands install a portal or returns app expecting it to solve the problem. Those tools help customers initiate returns, but they do not handle the work inside the building. A portal cannot open a box, evaluate condition, rebag an item, relabel a SKU, or decide whether something is restockable.

Joel Malmquist, VP of Customer Experience at G10, has seen what happens when software becomes a substitute for real operations. He said that at other 3PLs, "It is an offshore team," and the only response merchants hear is, "'We are looking into this.'" At G10 he emphasized, "Every single account at G10 has a direct point of contact," and if anything looks off, "you can either email or call your direct point of contact. It is that simple."

Outsourced returns processing pairs software with real people who understand your catalog, your rules, and your channels. It turns returns from a vague workflow into a disciplined operation.

HAZMAT returns: the line no brand should cross alone

Some products cannot legally return through standard processes. Batteries, concrete sealants, flammables, and other HAZMAT items require certified handlers and compliant carriers. Using a generic return label is not just risky. It is illegal.

Kay Hillmann, Director of Vendor Operations at G10, explained the issue bluntly. "A lot of people do not realize that because you have to be a certified shipper, you cannot send returns back," she said. "I cannot get a power station, for example, and then put a return label on it and ship it back, because there is no infrastructure." She added, "I would be liable giving you a return label to ship it back."

Outsourced returns processing with HAZMAT capability protects brands from fines, carrier shutdowns, and serious liability. It ensures dangerous goods follow the correct path every time.

Why a strong WMS is the backbone of outsourced returns processing

The difference between mediocre returns processing and professional returns processing is the warehouse management system underneath it. Without real-time tracking, returns disappear into carts or corners. Without scanning, units lose their identity the moment a box is opened.

Bryan Wright, CTO and COO at G10, described the standard clearly. "A good WMS tracks inventory through the warehouse at every point that you touch it," he said. "At any point in time, I know that Bobby has this product on fork 10 right now." That level of visibility makes outsourced returns processing dependable instead of mysterious.

A strong WMS connects every return to a status, a location, and a disposition. It also ties into all your sales channels so you can restock quickly and refund confidently.

Visibility is the difference between trust and frustration

Many brands switch to outsourced returns processing because their prior provider left them in the dark. Tickets took days to resolve. Updates were vague. Data made no sense. Outsourcing only works if visibility is part of the package.

Maureen Milligan, Director of Operations and Projects at G10, said that merchants expect "100 percent visibility" and want to "watch that progression throughout the stages of the fulfillment process." When returns share that same transparency layer, brands stop guessing and start planning.

Omnichannel returns require omnichannel logic

Ecommerce returns are no longer just ecommerce returns. They come from D2C storefronts, from Amazon, from wholesale partners, from retailers with strict compliance rules. Each channel has different expectations and different workflows.

Holly Woods, Director of Operations at G10, pointed out how G10's systems adapt. "Our omni-channel capabilities allow a lot more flexibility for our customers to pivot between D2C or B2B." Returns cannot be processed in isolation. They must flow back into the same system that allocates inventory, manages compliance, and routes orders.

The long-term advantage of outsourced returns processing

Outsourced returns processing does more than free up time. It turns returns into a data source. You learn which products fail most often, where damage patterns start, how sizing issues show up, and which channels generate the most rework. That feedback loop can shape product design, packaging decisions, and channel strategy.

Matt Bradbury, Director of Sales at G10, highlighted one of the overlooked benefits. "We have a very low churn rate," he said. "As far as industry standard goes, we have to be well below the norm. We churn fewer customers, and we churn fewer employees." That stability carries into returns. Fewer staffing disruptions mean fewer errors and more consistent execution.

When you are ready to hand off the hard part

Returns will never be glamorous, but they are essential to your brand's reputation and financial health. Outsourced returns processing gives you expertise, stability, and structure you cannot build overnight. It lets your team focus on growth instead of digging through boxes.

If returns are eating more time than they should, G10 Fulfillment can help you get control of the process. With scan based workflows, HAZMAT capability, omnichannel logic, and a WMS built in-house, G10 turns returns from a drain into a durable operational strength.