# What is Reverse Logistics?

What is Reverse Logistics? Managing product returns: collection, inspection, sorting, restocking, or recycling. Costs 2-3x regular shipping.

## How it works in practice

Every return costs: double shipping + labor + depreciation. A product returned in good condition can be resold at 80% of the price.

## Related metrics

- Return Policy — affects volume
- COGS — the cost of reverse logistics
- 3PL — sometimes included
- Customer LTV — an easy process means higher LTV

## Common misconception

'Returns are a total loss.' A product returned in 95% condition can be resold. A refurbished pool offsets 40-60% of the cost.

## How to fix it

Too many returns? (1) reasons: 'not as described,' 'damaged,' 'wrong size,' (2) a size guide / AR tool, (3) packaging, (4) a pickup point.

## Real-world example

A shoe store: 28% return rate, 75% due to 'wrong size.' A digital sizing tool cut it to 17%, saving $12,500/month.

## Where to start

Calculate the full cost of a return. Above 15% of AOV, fix the root cause.

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Category: Logistics · From the [Jimmy OS KPI Glossary](https://jimmy-os.com/glossary/kpi.md) · Source page: https://jimmy-os.com/glossary/kpi/reverse-logistics