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Sustainable reverse logistics: rethinking returns for retail and the circular economy
For years, returns have been treated as a chore by retailers – a necessary inconvenience at the end of the customer journey. Managing returns and buybacks, known as reverse logistics, has traditionally been viewed as costly, complicated and harmful to the environment. But the world is changing. Today, improving the sustainability of reverse logistics isn’t just an operational hurdle – it’s a strategic advantage driving both retail success and circularity.
A hidden opportunity
With the advent of online shopping, returns have become a daily reality for retailers. And with that comes a hidden but substantial cost. According to IHL Group, overstock – including unsold, returned, and warranty-covered products – costs retail businesses $562 billion a year. It’s wasteful, unsustainable, and expensive. But it’s more than just a challenge – it’s an untapped opportunity.
Surplus stock – once considered a liability – can be given a new lease of life. Returned, overstocked and surplus devices can be processed, refreshed, and remarketed – unlocking new revenue streams and helping brands build trust with their customers. By extending the lifecycle of these products, companies foster sustainability and strengthen customer loyalty. It’s the powerful combination of reverse logistics and the circular economy in action. The key is establishing infrastructure that’s as agile and circular as the products flowing through it.
The engine behind circular retail
Recommerce – the resale of returned or pre-owned products – relies on efficient and sustainable reverse logistics. Done right, it’s a win-win: customers get value, businesses reduce losses, and the planet benefits. Trade-in programs for electronics are already setting the pace. Brands like Apple and Samsung have made device trade-ins mainstream, capturing secondary market buyers and keeping customers in their ecosystem.
But building an effective reverse supply chain is a real challenge. Processing returns and refurbishing products can cost retailers up to 15% of their revenue. That’s why more than 75% of retailers plan to invest in reverse logistics automation in 2025 alone. And the recommerce market is growing rapidly, expanding at roughly 9.4% per year.
How to make reverse logistics sustainable
Getting returns and recommerce right isn’t just about returns desks or free shipping labels. It starts with:
- Inventory intelligence: Tracking and analyzing return trends to predict opportunities in the secondary market.
- Monitoring resale channels: Staying close to the used and refurbished market, adjusting supply and prices proactively.
- Specialist partnerships: Working with reverse logistics experts who understand regional regulatory requirements and can help you maximize value.
- Smart pricing: Structuring prices and promotions so that refurbished or refreshed products offer real value – helping customers make sustainable, choices that are kinder to budgets without undermining the new product business.
Circularity is good business
Refreshed and remarketed devices offer substantial sustainability benefits alongside their financial value. Every device or item that gets a second life via recommerce means less waste and less demand on natural resources. For example, refurbishing a smartphone saves 64kg of CO2, 244kg of raw materials, and nearly 76,000 liters of water compared to making a new one.
At Alchemy, we’ve processed over 10 million devices safely and securely, operating with advanced, proprietary technology spanning more than 60 global markets. Brands investing in smarter reverse logistics and an agile circular model are realizing both commercial and environmental gains – reshaping their bottom line and their impact on the planet.
We're not just growing as a business – we're reshaping the circular tech economy. In today’s market, success means keeping every product in motion, for the benefit of customers, brands, and the planet.
