What if your biggest expense could become your fastest-growing profit center? While most eCommerce brands watch return rates climb to 24.5% and cost the industry $890 billion annually, three savvy operators have cracked the code on turning this "problem" into pure profit.
In a recent eCommerce Explored webinar, host Chloe Thomas sat down with three battle-tested experts who've built their careers on transforming returns headaches into customer retention goldmines. Their message? Stop treating returns like failures and start treating them like inventory.
Meet the Experts
John O'Brien from ShipCycle has spent years mastering global returns management. His specialty? Keeping returned products in local markets instead of shipping them across continents, turning logistics nightmares into reCommerce wins.
Ryan Atkins, co-founder of SuperCycle, built a Shopify-native platform that proves you don't need to rebuild your entire operation to go circular. His tools integrate rental, resale, and product-as-service models right into existing stores.
Zoe Rowswell from Tern Circular created white-label software that enables any brand to launch comprehensive circular programs while maintaining complete control over customer relationships.
Stop Treating Returns Like Failures and Start Treating Them Like Inventory
The biggest transformation these experts push starts with changing how you think: returns aren't operational failures, they're inventory sitting in the wrong place.
"We look at the practical sense in terms of managing the day to day, because like Chloe said, sustainability is a huge mammoth of a task. So how do you eat an elephant bite by bite?" John explains. His approach keeps products in local markets for immediate resale, rather than relying on expensive international shipping that drains profit margins.
Ryan backs this with hard customer data: "Customers that participated in a circular recycling program spent more money on their subsequent visits to the store than customers that didn't use that recycling program. So that retention, that lifetime value piece has been proven out."
The psychology mirrors what works in conversion optimization. When customers know they can easily trade in or resell their purchases, they feel more confident making the initial purchase decision.
Trust First, Profits Follow
Zoe hits on the critical foundation for making circular programs work: "Where I see the most success is where sustainability is a core intrinsic value within the business and that everyone understands what journey that business is on and plays their part in delivering against it."
This can't be bolted onto your existing operation as an afterthought. The approach needs to be built into everything, including how you select your returns management software.
The execution tactics mirror proven conversion strategies:
Eliminate Friction: Make trade-ins and returns completely seamless. With returns costing merchants $100 per order, smooth processes directly impact your bottom line.
Demonstrate Clear Value: Zoe shares compelling evidence: "When they were shown two identical products at different price points, customers were willing to pay the higher price for the one that was advertised as part of a circular recycling program."
Perfect the Mobile Experience: Since circular commerce customers trend younger, the mobile experience must be flawless at every touchpoint.
Triple Your Conversion Rate With Multiple Access Options
Ryan delivers what might be the most powerful insight about revenue growth: "If you give customers more optionality for how they can access your product, you will convert more of the visitors to your brand, to your website, to your products. So it is absolutely both. You can triple your conversion rate, and you can improve retention."
Instead of limiting customers to "buy it or leave it," successful brands now offer multiple pathways:
- Buy new at full price
- Rent for special occasions
- Trade in existing items for credit toward new purchases
- Buy pre-owned at discounted prices
Each option captures different customer segments and purchase motivations, expanding your total addressable market.
The compound effect goes beyond initial conversions. Zoe points out that customers often combine these options: "In our experience, customers are mixed baskets. People buy both second-hand and new together. They're happy to do that."
Why Circular Brands Know More About Their Products Than Linear Brands Ever Will
Circular commerce generates data that traditional retailers never see. You get so much rich data about customer behavior, customer lifecycle, product, durability, wear and tear that you can then build back into your product manufacturing and design, Zoe explains.
Traditional linear retailers miss this intelligence completely. But circular brands track:
- Which products maintain value best across multiple ownership cycles
- What drives customers to trade in versus keep items
- How to price trade-in credits for maximum customer retention
- Which circular touchpoints generate the highest lifetime value
Ryan frames this as business evolution: "All paths lead to circular. And there is a part of circular which addresses whatever commercial goal that you're currently looking to look at."
Start Small, Think Big
These experts recommend targeting quick wins that prove value before scaling:
International Brands: Address Cross-Border Returns First. John's reasoning is economically sound: "Why ship it all the way to London and then all the way back to Melbourne? An exceptional cost, by the way. When you can just send it from Sydney to Melbourne, next day I've always got it."
Fashion Brands: Launch simple trade-in programs offering store credit. With clothing return rates hitting 25-40%, the inventory flow already exists. Modern circular and second-hand markets software automates most operational complexity.
All Other Brands: Select one customer segment and one product category for testing. Zoe's guidance: "Start somewhere, pick a customer group, pick a particular product category, test and trial."
The measurement approach must extend beyond basic profit and loss. Zoe emphasizes: "It's super important when you are thinking about running these programs that you're thinking about these KPIs and that you're not looking at the profit and loss as the sole point of truth for what these programs are driving for your business."
From Custom Build Nightmares to Plug-and-Play Solutions
The technological barriers that once made circular commerce impossible have largely been overcome. Ryan explains: "We're a native to Shopify circular commerce platform. So rental, resale, and products as a service as part of your existing technology stack."
Today's available capabilities include:
- AI-powered product grading and dynamic pricing
- Automated quality control systems that scale efficiently
- Inventory management handles both new and circular stock seamlessly
- Customer portals enabling easy trade-ins and purchases
For brands seeking more effective sustainability strategies, explore our sustainable eCommerce tools, which provide a foundation for successful circular operations.
The Bottom Line
Circular commerce operates on the same principles as effective conversion optimization: understand your customers deeply, eliminate barriers systematically, provide clear value consistently, and optimize based on data insights.
The critical difference lies in scale potential. Instead of improving existing metrics incrementally, circular commerce unlocks entirely new revenue streams while significantly extending customer lifetime value.
Ryan captures the market reality: "The new Dawn is circular. Start, iterate, and expand based on the data and what's working for you."
Leading brands are building these systems now while competitive barriers remain low. The question isn't whether this approach will become standard; it's whether your brand will drive the transformation or struggle to catch up when market dynamics shift permanently.
Identify your biggest operational pain point, implement one circular touchpoint, measure everything rigorously, and scale successful elements systematically. With over half of shoppers now buying pre-owned or refurbished goods, circular commerce isn't just environmentally responsible; it's competitively essential.
You can watch the full webinar replay here for direct insights from John, Ryan, and Zoe. For more exclusive content, sign up for future sessions with our eCommerce Explored series. Additionally, you can explore our Returns Management tech directory for more.
