How to Manage Returns in the Holiday Season

Why returns management hits its limits in the holiday season 

Black Friday, Cyber Monday, the first Christmas purchases: from November on, business is in full swing. Order volume rises, and so does the number of returns.

Wave 1: Impulse purchases 

The first wave of returns arrives right after Black Friday, with impulse purchases that don't convince once they're unpacked.

Wave 2: Wrong gifts 

The second follows after Christmas, with gifts where buyers didn't choose the right thing for the recipient. The third wave breaks in January, when the buying and gifting frenzy ends altogether. Many retailers voluntarily extend their return window to 30 to 60 days, especially around Christmas, to make buying easier.

That's a sensible move, but it shifts the wave of returns squarely into January. That's when your team is busy with year-end close, inventory and the new-year restart all at once.

Standard processes are built for normal operations, not for two to three times that. On top of normal operations come manual inspections, one-by-one handling and status updates by hand. What works at 80 returns a week becomes a capacity trap at 250.

These levers cut your return costs 

Return costs start at the moment of purchase. Whether a return happens also depends on how well informed the purchase was. So there are three different points where you can intervene.

Lever 1: Informed customers return less often 

The cheapest return is the one that never happens. Especially with gift items, where the buyer won't wear or use the product themselves, wrong purchases are more likely.

As baseline information, you need size charts, sizing guidance, material details and reviews with concrete feedback on fit and use.

If necessary, update them before the holiday season to reduce returns caused by poorly informed customers.

Lever 2: Set up a self-service returns portal 

When customers want to start a return, they often end up at support, whether by email, phone or chat. At the seasonal peak, that's the most expensive channel you can use for it.

A self-service portal shifts the start of the return to the customers themselves: they pick the item, state the reason for the return and print the label. Your team gets relief right away, because it receives structured data instead of unstructured requests.

Lever 3: Batched goods-receipt inspection instead of one-by-one handling 

Inspecting every return individually as soon as it arrives sounds diligent. At the seasonal peak, it's an efficiency problem. Instead, set up defined time windows for goods-receipt inspection, for example twice a day in batches rather than continuously.

That reduces context switching, raises throughput per hour and makes staffing capacity more predictable.

Simple, transparent returns: these levers boost customer satisfaction 

Cutting the cost of returns while raising customer satisfaction isn't a contradiction. What matters is how you handle the return.

Customers who wait three days for a receipt confirmation and don't know whether they'll get their money back write a review. Customers who get through a return without hassle buy again.

Lever 1: Transparent status communication 

Whatever the season, customers always want to know how "far along" their return is. You can automate a lot here: automatic status emails (receipt confirmed, inspection in progress, refund triggered) cut support requests dramatically and build trust, without your team having to follow up manually.

Lever 2: Fast refunds as a signal of trust 

Delayed refunds are among the most common triggers of negative reviews after returns. For known customers with a good purchase history, the refund doesn't necessarily have to wait for the physical goods receipt. Triggering it earlier is a clear signal that builds trust.

Lever 3: Actively offer an exchange instead of a refund 

Customers who send back a Christmas gift don't always want their money back; often they want a better-fitting product. Offer an exchange as part of the returns process. But it shouldn't be a hidden form field; it should be actively communicated as the first option. That way you can keep the revenue in-house and turn a cost item into a cross-sell or upsell opportunity.

Worked example: what an unprepared process costs at the seasonal peak 

Your own numbers depend on your range, process maturity and team size. But the example shows the order of magnitude of the difference between a prepared and an unprepared process for peaks like Christmas returns.

Say a shop handles 300 returns a week at the seasonal peak. In a manual, one-by-one process without self-service pre-capture and batch processing, handling time is around 12 minutes per return.

With a prepared process, where customers have already captured the reason for the return in a structured way and goods-receipt inspection runs in batches, that drops to around 6 minutes.

Over four weeks of seasonal peak, that adds up to roughly €3,600 in extra effort from the difference in process structure alone, without factoring in any additional return volume.

Scale that up to a team that's also managing new orders, shipping and year-end close at the same time, and it quickly becomes clear how much good preparation matters.

How Xentral supports returns management 

An ERP is no substitute for a well-thought-out returns strategy. But it is the operational foundation that strategy runs on. Xentral brings returns, credit notes and replacement deliveries together in one system. In practical terms, that means:

• Create returns and link them to the original order

• Create credit notes directly from the returns process

• Trigger replacement deliveries without re-entering the case manually

• Enable traceability via batch and serial numbers

In addition, Xentral's ERP includes AI agents such as the returns and refunds agent: it reads incoming return requests by email, identifies the reason for the return and the items affected, and suggests next steps to the team, including ERP context.

That reduces the manual effort of the initial review, without your team having to open and categorize every email one by one. Since the feature is still in beta, we recommend using it as a supplement and checking the results in live operations.

For most retailers in the target segment, Xentral is a solid, integrated foundation. For the majority of growing commerce companies in the DACH region, it's enough to manage the holiday season in a structured way.

If you need very complex, CX-intensive returns processes, such as a fully branded self-service portal with extensive configuration options, you can add those features through integrations in Xentral.

Checklist for returns process: 5 things to have done before peak season 

☐ Review and complete product information: Update size charts, sizing guidance and material details before the Christmas business starts. Especially for items that are often bought as gifts.

☐ Set up and test a self-service returns portal: Customers should be able to start returns themselves without burdening support. The reason for the return and the item selection are captured in a structured way.

☐ Configure automatic status emails: Receipt confirmation, inspection status and refund trigger are communicated automatically, with no manual effort for your team.

☐ Plan batch processing for goods-receipt inspection: Define time windows and plan staffing capacity. Batched inspection twice a day is more efficient than continuous one-by-one handling.

☐ Actively build exchanges into the returns process: Not as a hidden form field, but as a communicated first option.