How to Manage Global Returns in the Era of Tariffs

For the last two decades, brands enjoyed a relatively borderless world of commerce. International fulfillment was a straightforward equation: move goods where customers were, and move them back when necessary. Returns could flow across borders with little concern beyond shipping costs.

That reality has changed. The era of steep tariffs has introduced friction and cost into global mobility. Every movement of goods across borders now carries added expense in freight, duties, tariffs, and lost margin. For international brands, especially those shipping into the United States, returns have become a financial pressure point.

If your products are already in the U.S., sending them back overseas for processing often means incurring costs twice: once on the inbound import, and again on the outbound return. This is where many brands are feeling the pinch.

The solution? Rethink returns management. Rather than treating returns as a necessary evil, global brands can transform them into an opportunity—provided they know how to extract maximum value locally.

The Tariff Effect on Returns

Back when movement of goods flowed more smoothly, you could overlook a few inefficiencies throughout your supply chain and it wouldn’t hurt too much. However, tariffs increase the cost of getting inventory into the U.S., which then amplifies your losses when it comes to time, revenue, and opportunity.

Here are a few ways we’ve seen brands and retailers get hit the hardest.

1. Double tariffs

Goods imported to the U.S. from Australia (or elsewhere) may be subject to tariffs. If returned stock is shipped back to the country of origin, duties may apply again.

Tip: You may be able to use Duty Drawback to recoup some of the tariffs you spent on returned goods, but it isn’t a guarantee and requires filing and awaiting a decision before you get the money back.

2. Added logistics costs

International freight, customs brokerage, and handling add significant expense compared to domestic returns processing. Even if you already factored your international shipping fees into your sale prices, did you factor them in twice?

3. Lost time-to-resale

The longer returns are in transit, the less likely they are to be resold at full value. This is particularly true in categories like apparel (a swimsuit could be in customs longer than the sun is out), electronics (the next model of electronics are always coming soon), or other seasonal goods.

In this environment, managing returns cross-border is rarely economical. Brands must instead make the most of their inventory where it sits: in the U.S.

Why Manage Returns Locally in the U.S.?

There are two compelling reasons why international brands should centralize returns management in the U.S.; cost containment and customer experience.

• Cost containment: Keeping returns stateside eliminates the unnecessary expense of reverse global shipping. Instead of paying to ship goods back to Australia or another HQ, brands can inspect, resell, or repurpose products locally.
• Customer experience: U.S. consumers expect free or low-cost returns, and they expect them to be simple. Routing returns overseas introduces delays and complexity that can damage customer trust.

A localized returns process balances both goals: minimizing costs while maintaining the convenience today’s shoppers demand.

Evaluating Returned Inventory for Maximum Value

Not every return is a loss. With the right evaluation process, returned goods can be recovered, repurposed, or resold in ways that protect margin.

Below is a tiered approach we recommend you take to make the most of your returned inventory.

Step 1: Inspection and grading

First, develop a standardized inspection process to categorize returns.

Here are three simple buckets to group your returns into.

• Like New: These returned items are unopened, unused, and can be resold as new. Ideally, you would have a method to do this within the U.S.
• Open Box: These are items that have been opened, but can be resold with minor repackaging or a discount.
• Damaged/Defective: These items are not fit for direct resale, but potentially valuable in other ways. See step 2.

Step 2: Refurbishment and repackaging

Lightly used or opened products often only require repackaging, which can be done with U.S-based 3PLs or logistics partners.

You may also have a warranty program, where you’ll fix any damaged items free of cost. If this is the case, consider keeping your open box or damaged returns for parts to use for repairs. We’ll touch on this again later.

In other cases, refurbishment can return items to near-new condition for resale through primary or secondary channels. See step 3.

Step 3: Channel diversificiation

Not all returns need to flow back into your main storefront. Secondary channels, such as discount retailers, liquidation marketplaces, or outlet sales, can absorb salvageable goods and recover otherwise lost revenue.

Consider using your returned goods in creative ways as well. For example, offering a “surprise second-life gift” as part of your bundles, throwing in a returned (but still good) item so your buyers can try a new product.

This tiered approach ensures every unit is assessed for maximum possible value.

Beyond Resale: Alternative Paths for Returned Goods

Some returns cannot (and should not) be resold. But that doesn’t mean they’re worthless. Smart brands find creative ways to salvage value, including:

• Warranty & Spare Parts: Returned products can be harvested for components that serve as replacements in warranty claims. This both reduces costs for future repairs and provides a sustainable use for otherwise unsellable goods.
• Donations & Sustainability Programs: Unsalvageable returns can be donated to charities or repurposed through sustainability programs. This not only prevents waste but also enhances brand reputation in an era where consumers value corporate responsibility.
• Recycling & Responsible Disposal: For goods that can’t be resold, repurposed, or donated, environmentally conscious recycling and disposal processes help minimize environmental impact and boost consumer trust.

The goal is simple: no unit should go to waste without first being assessed for alternative use.

Building a Smarter Returns Strategy in the Tariff Era

Managing returns effectively requires more than just processing packages. It requires a returns strategy built around cost efficiency, customer satisfaction, and data-driven insights.

No matter what your returns strategy becomes, it’s important to incorporate data and analytics, develop your return policy, and integrate your fulfillment operations.

Our top tips:

• Track why returns occur (wrong size, defective product, unmet expectations).
• Identify patterns that can be corrected upstream (better product descriptions, improved packaging, quality control).
• Create clear, customer-friendly return policies to reduce disputes and increase loyalty.
• Balance “free returns” with policies that protect against abuse (such as restocking fees for high-cost goods).
• Returns should not be siloed from fulfillment. Integrating returns processing with inventory management ensures goods can be restocked or diverted quickly.

Why Partnering With a Local Logistics Provider Matters

Even the most well-designed returns policy fails without strong execution. This is where a trusted U.S.-based logistics partner like iDrive Logistics becomes invaluable.

Fulfillment + Returns Under One Roof

A local fulfillment provider can handle end-to-end fulfillment to ensure that returned inventory doesn’t sit idle or get lost in disconnected systems That means returned inventory can be inspected, graded, and reintegrated into active stock faster and more efficiently within the same ecosystem. By consolidating fulfillment and returns under one roof, brands gain greater visibility, reduce turnaround times, and maximize the value of every returned unit.

Carrier Rate Optimization

Returns are already expensive, especially when customers expect them to be free. iDrive leverages relationships with carriers to secure the most competitive return shipping rates. This helps brands brands reduce per-unit return costs without sacrificing customer convenience. The result is a more sustainable balance between customer satisfaction and operational efficiency.

Flexibility in Returns Routing

Not all returned items are the same, and treating them as such often leads to wasted value. Remember the grading exercise we discussed above? Depending on the condition of the item, returns can be rerouted directly into resale, refurbishment, parts harvesting, or liquidation channels all from within the U.S. And when all of this happens domestically within the U.S., it reduces logistical complexity and speeds up secondary market opportunities.

Improved Customer Experience

By offering consumers fast, seamless return options, brands maintain trust and reduce friction. Behind the scenes, iDrive handles the complexity and intricate logistics and decision-making required to process each unique return efficiently. This frees up brands to focus on growth, while customers enjoy a smooth, hassle-free experience that reinforces their confidence in the brand.

A Practical Example: Australian Brand Expanding in the U.S.

Imagine an Australian apparel company shipping products into the U.S. Without a localized returns strategy, every return risks being sent back to Australia, incurring duplicate tariffs, high freight costs, and long delays.

With a U.S.-based partner like iDrive:

• Returns are processed domestically.
• Items are quickly inspected and either resold as new, discounted, or redirected into outlet channels.
• Damaged items are salvaged for parts or responsibly recycled.
• The brand avoids paying tariffs twice while offering American consumers a fast, easy returns experience.

The result? Lower costs, happier customers, and a more sustainable global operation.

Conclusion: Every Shipment Matters More Now

In the era of tariffs, brands can no longer treat cross-border mobility as a given. Every shipment carries financial and strategic weight and importance. Returns, once an afterthought, are now a critical point of leverage in maintaining profitability and customer loyalty.

By rethinking returns as a source of value, not just loss, brands can thrive even in a tariff-heavy environment. And by partnering with a U.S.-based logistics provider like iDrive Logistics, they can unlock the full potential of their U.S. inventory by reducing costs, improving customer satisfaction, and staying competitive in a challenging global marketplace.

Ready to turn returns into an advantage? iDrive Logistics helps international brands manage U.S. fulfillment and returns with efficiency, cost savings, and customer experience at the forefront.