Returns Disposition: The Decision That Shapes Margin And Inventory Health

Why disposition is the most underestimated step in returns

Most brands think the hard part of returns is getting the product back. The real challenge begins after that. Returns disposition is the step where your team decides what happens next. Does the item go back into sellable inventory, get repackaged, get routed to a secondary channel, get quarantined, or get written off? That single decision affects margin, stock accuracy, refund speed, customer satisfaction, and operational sanity. When disposition is messy, everything downstream gets messier. When it is structured, returns stop feeling like a burden and start acting like a controlled workflow.

You can tell a lot about a brand's returns maturity by how they handle disposition. If it is a guessing game, costs balloon. If it is a repeatable process, margin improves quietly and consistently.

The danger of subjective disposition calls

Most early stage brands rely on gut judgment. One operator thinks something is resellable. Another thinks it should be discounted. A third places it in a corner to decide later. That kind of subjectivity does not scale.

Connor Perkins, Director of Fulfillment at G10, knows why this breaks so quickly. "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." That subjectivity directly affects disposition. If ten people make ten different decisions, your inventory turns into fiction.

That is why a real returns disposition process eliminates guesswork. It gives operators clear criteria so that resellable items get restocked, questionable items get flagged, and damaged items never contaminate good inventory.

How poor disposition damages inventory accuracy

Disposition determines whether an item reenters your sellable stock. If the call is wrong, your inventory numbers are wrong. If the call is delayed, your inventory availability is delayed. If the call is inconsistent, your storefront becomes unreliable.

Connor often hears painful stories from brands coming from weak providers. "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." The same kind of inaccuracies happen with disposition. A single wrong disposition call can create overselling or prevent good units from being listed.

Disposition is not just about saying yes or no. It is about saying it the same way, every time, with data to back it up.

The role of HAZMAT in returns disposition

Disposition decisions become even more serious when HAZMAT products enter the mix. Batteries, flammables, sealants, and industrial goods cannot be casually restocked or casually destroyed. They have strict handling, storage, and carrier rules.

Kay Hillmann, Director of Vendor Operations at G10, explained why this matters. "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."

If a brand mishandles HAZMAT disposition, they are not just risking a bad customer experience. They are risking fines, insurance issues, and carrier violations. Outsourced disposition with certified HAZMAT support protects against those risks.

Why omnichannel selling demands smarter disposition

A Shopify return might be inspected, rebagged, and put back into D2C stock. An Amazon return may require relabeling or special prep. A wholesale return might need full reconciliation and may not be eligible for resale at all.

Jen Myers, Chief Marketing Officer at G10, sees how complicated this gets for growing brands. "We have some customers that come in and build a successful business. They go B2B primarily, and then they know they have to be successful in the D2C space or e-commerce. And they know Amazon is the big gorilla in that space, but maybe they do not know how to navigate it." She added, "It is still e-commerce, right? And so it is still the same beast in a different skin."

That means disposition cannot be a single decision tree. It must reflect the channel where the product will be sold again, or whether it can be sold again at all.

The WMS foundation of strong disposition workflows

You cannot have reliable disposition without a reliable warehouse management system underneath it. Without scanning and status changes, disposition decisions disappear into the ether. Without location tracking, quarantined items mix with sellable ones.

Bryan Wright, CTO and COO at G10, explained 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 tracking makes disposition traceable, auditable, and fast.

A strong WMS ensures that every disposition decision results in a clear status: restock, rework, rebag, relabel, quarantine, destroy, or return to vendor. No guesswork, no gaps.

Visibility that eliminates customer uncertainty

Most customer frustration around returns comes from not knowing what is happening. Disposition delays lead to refund delays. Refund delays lead to support tickets. But when disposition is logged, tracked, and timestamped, those questions disappear.

Maureen Milligan, Director of Operations and Projects at G10, put it plainly. Customers want "100 percent visibility" and want to "watch that progression throughout the stages of the fulfillment process." When disposition is integrated into the same visibility layer, support teams stop guessing and customers stop waiting.

The human element inside disposition decisions

Even with structure, disposition requires attention to detail. That is why the people who perform it matter. Many 3PLs treat returns as a back corner chore or assign it to the least trained staff.

Joel Malmquist, VP of Customer Experience at G10, highlighted what happens when providers do not staff returns properly. At some 3PLs, "It is an offshore team" and merchants hear, "'We are looking into this.'" At G10, he said, "Every single account at G10 has a direct point of contact," and "you can either email or call your direct point of contact. It is that simple."

Having knowledgeable humans connected to your account means disposition questions get resolved quickly and accurately.

Consistency: the overlooked advantage in returns disposition

A stable team produces stable disposition decisions. High turnover produces chaos. Brands often underestimate how much experience matters in recognizing patterns, handling edge cases, and making correct calls.

Matt Bradbury, Director of Sales at G10, explained one of G10's biggest operational strengths. "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 keeps disposition decisions consistent and predictable.

Turning disposition into a profit lever

Brands that master disposition recover more product, reduce write offs, prevent inventory corruption, speed refunds, and create cleaner data loops. Over time, disposition trends reveal which products create the most returns, which channels create the most work, and which processes need redesigning.

G10 Fulfillment has built its disposition workflows, scanning practices, and WMS logic to turn returns disposition from a tedious task into a reliable operational advantage. If disposition today feels slow, inconsistent, or unclear, it may be time to upgrade from guesswork to a real system.

When you want returns disposition to protect margin instead of eroding it, G10 Fulfillment is ready to help you make that shift.