How to Automate Returns and Exchanges for E-commerce

Returns are the hidden margin killer of e-commerce. Industry averages sit between 20-30% for online apparel and 8-12% for general merchandise, yet most businesses still process them manually: reading emails, generating labels, issuing refunds one at a time, and updating inventory by hand. That workflow breaks at scale. An automated returns pipeline eliminates the bottleneck and turns reverse logistics into a competitive advantage.

This tutorial shows you how to build a complete returns and exchanges automation using Make.com, your e-commerce platform, and a shipping provider like ShipStation.

Understanding the Returns Automation Architecture

An automated returns system has four distinct phases. Each phase must pass structured data to the next. Here is the complete flow.

Fig. 1 — Full returns and exchanges automation with decision branching

Step 1: Set Up the Self-Service Return Portal

The automation starts before your team is involved. Deploy a self-service return portal where customers enter their order number, select items to return, choose a reason, and indicate whether they want a refund or exchange. Tools like ReturnGo, Loop Returns, or a custom Typeform/Jotform integration work well here.

When the customer submits the form, a webhook fires to Make.com carrying the order ID, return reason, item SKUs, and requested action (refund or exchange). The scenario immediately validates the request by checking the original order date against your return window (typically 30 days) and confirming the order status is "fulfilled."

Step 2: Generate the RMA and Return Label

If the request passes validation, the scenario generates a Return Merchandise Authorization (RMA) number. Use a simple formula: RMA-[OrderID]-[Timestamp]. Store this in a Make.com data store alongside the return details.

Next, call the ShipStation API (or EasyPost, Shippo) to generate a prepaid return shipping label. The API returns a label URL and tracking number. The scenario then sends an automated email to the customer containing the RMA number, return label PDF, and packing instructions.

• Include clear instructions: "Write the RMA number on the outside of the box."
• Set a deadline: "Ship within 7 days to receive your refund."
• Provide the tracking link so they can verify delivery.

Step 3: Monitor Return Shipment and Trigger Processing

Set up a scheduled scenario that polls the carrier tracking API every 6 hours for all open RMAs. When a return package shows "delivered" status, the scenario updates the RMA record and notifies your warehouse team via Slack or email to inspect the item.

For warehouses using barcode scanning, the RMA number on the package can be scanned to pull up the return record and expected items. This eliminates the guessing game of "whose return is this?"

Step 4: Process the Refund or Exchange

After inspection, your team marks the item as "approved" or "rejected" in the data store (or clicks a button in an Airtable/Google Sheet dashboard). This status change triggers the next scenario.

For refunds: The scenario calls the Shopify Refund API to issue the refund to the original payment method. It then creates a credit memo in QuickBooks, updates inventory counts (restocking approved items), and sends the customer a refund confirmation email with the expected processing time.

For exchanges: The scenario creates a new order in your storefront for the replacement item at $0.00 (or with the price difference if applicable). This new order flows through your standard fulfillment automation, and the customer receives a shipping confirmation when the replacement ships. The returned item is restocked if it passes QA.

Step 5: Track Metrics and Identify Patterns

Every return that flows through your automation generates structured data. Pipe this into a dashboard (Google Sheets, Airtable, or Power BI) to track return rates by SKU, most common return reasons, average processing time, and exchange vs. refund ratios. If a specific product has a return rate above 15%, trigger an automated alert to your product team to investigate quality or listing accuracy issues.

Fig. 2 — Sample metrics from a fully automated returns pipeline

Common Pitfalls and How to Avoid Them

• No validation at intake: Always check the return window and order status before generating an RMA. Otherwise you will process returns for orders that are ineligible.
• Missing inventory reconciliation: Returned items must update your stock counts. If you skip this step, your inventory sync will drift from reality.
• Ignoring partial returns: Customers sometimes return only one item from a multi-item order. Build your automation to handle line-item-level returns, not just full-order returns.
• No fraud detection: Add a filter that flags customers who have submitted more than 3 returns in 60 days for manual review before auto-approving.

"Automating returns cut our processing time from 5 days to same-day and increased our exchange conversion rate by 40%. Customers actually appreciate the speed." — DTC brand processing 200+ returns/month

Once your returns automation is running, it pairs naturally with your forward logistics. If you have not yet automated the outbound side, start with our dropshipping automation tutorial. For a real-world case study of this workflow in action, read our e-commerce returns case study.