Supply Chain Now — "Ask Me Anything on Reverse Logistics & Returns"

Date: October 20, 2025
Host: Scott Lewton
Guest Host: Claudia Freed (EAL Green)
Featured Guest: Chuck Johnston (Chief Strategy Officer, Return Pro)

Overview

This episode of Supply Chain Now, hosted by Scott Lewton with co-host Claudia Freed and guest Chuck Johnston, spotlights the massive world of reverse logistics and returns management. The discussion delves into the scale, challenges, innovations, and future prospects in the returns sector—an industry approaching $1 trillion in the US alone. With decades of experience, including leadership at Walmart and Home Depot, Chuck shares insights on technological disruption, emerging trends, persistent challenges, and opportunities for professionals, companies, and social impact organizations.

Key Discussion Points and Insights

1. The State of Reverse Logistics & Returns (03:36 – 10:36)

• Chuck Johnston’s Background:

  • Military beginnings at West Point, transition into warehouse design at Walmart.
  • Early challenges: Returns managed with “yellow notepad and stubby pencil” (06:32).
  • Pioneered automation for returns in 1995, seeing entrepreneurial opportunity where few others did.
  • Leadership roles at both Walmart and Home Depot, then entering the 3PL/returns management sector.

• Vision and Legacy:

  • Chuck considers his legacy to be “the passion I have for the industry and the ability to get others engaged in it from 3PL providers to whoever and hopefully have been a voice to promote the industry…” (08:08).

• Claudia Freed’s Reflection:

  • Applauds Chuck’s “visionary soul,” emphasizing the value of relationships and innovative spirit (09:41).

2. Returns as a Strategic Issue, Not Just a Cost Center (14:16 – 18:35)

• Scale and Impact:

  • Returns in the US topped $890 billion last year, but official numbers understate complexities—“There’s a lot of touches, some goes back to stock... last year was the first time that ecommerce sales or returns outpaced big box returns” (14:16).
  • 60% of ecommerce returns are brought back to physical stores, creating operational challenges.

• The True Cost of Returns:

  • The average return costs the retailer $20–$30 when accounting for freight, processing, and labor (15:58).
  • Most companies do not accurately capture total returns costs across departments (returns desk, customer service, product movement, etc.), making it hard to justify investment.

“Returns compete with stores, compete with supply chain for capital dollars and have to show a return on investment.” — Chuck Johnston (00:00, 17:47)

3. Consumer ‘Entitlement’ and Shifting Behaviors (19:13 – 21:39)

• Changing Customer Expectations:

  • Free and easy returns are now expected by 70–80% of consumers; it’s a primary driver of retailer choice.
  • Retailers find it difficult to introduce restrictive policies due to fear of losing market share: “...nobody in the industry, they're not, there's not this unilateral group that says hey, let's all be restrictive on returns.” (20:25)

• Category Insights:

  • Gardening tools have the lowest rate of returns; jewelry has high returns due to sizing issues (20:40).

4. Technology’s Growing Role in Returns Management (22:00 – 33:42)

• Key Innovations:

  • Ecommerce Disruption: The rise of Amazon/Ecommerce is the largest change in the last 20 years.
  • Business Intelligence: Enhanced data analytics and BI tools support better returns forecasting and planning (22:00).
  • AI and Algorithmic Routing:
    • “The ability to create an algorithm that can look all the way at the consumer first decision point...to where the best path for this needs to be.” (28:05)
    • AI helps optimize cost/decision-making, mitigate fraud, and personalize the returns experience.

• Claudia’s Perspective:

  • EAL Green uses Oracle’s AI “Model Context Protocol” to manage returned/donated inventory, automating identification and sorting (29:25).

• AI Implementation Advice (Claudia):

  • “Number one, what problem are you trying to solve? Pick the right tool … and make sure your data infrastructure can handle AI.” (33:14)

5. Circularity & the Debate on ‘More Returns’ (34:27 – 38:20)

• Circular Supply Chain:

  • Debate on whether encouraging more returns aids sustainability.
  • Chuck: “In reality, you don’t make money in returns, you mitigate loss... But...from a circularity standpoint, the more of that [product] you could get back... where people understand the process and are managing it effectively, I would agree.” (35:04)
  • Claudia: European Union’s “Circular Economy Act” (effective 2026) will require more returns to reduce landfill and recover raw materials (37:00).

• Industry Take-Back Programs:

  • Some sectors (e.g., cell phones) already offer product take-back to recover valuable materials, but Chuck jokes, “Nobody wants more canoes” (38:17).

6. Persistent and Emerging Challenges (25:34 – 41:54)

• Secondary Market Bottlenecks:

  • The surge of returns is outpacing outlet capacity. Recent bankruptcies (e.g., Bargain Hunt) signal growing pains (25:34).

• Returns Fraud:

  • $103 billion in fraudulent returns annually (NRF data).
  • “40% of consumers have admitted that they do a fraudulent return” (39:33).
  • Countermeasures: Habitual returner tracking, receipt requirements, AI/image recognition tech, digital IDs for traceability.
  • Persistent challenge: Even with tech, “...if you want to have a fraudulent return, doesn't necessarily mean the thing I took a picture of is the thing I put in the box.” (41:54)

• Call for More Ambassadors & Education:

  • Returns still struggle for C-suite attention. Need for formal education and “ambassadors” inside companies.
  • “There’s nobody in our industry that has more than 1% market share. Room at the table for everybody. All ideas are welcome.” (56:20)

7. Opportunities for Impact and Getting Involved (49:56 – 54:22)

• Advice to Professionals & Organizations:

  • Engage with 3PLs/returns specialists.
  • Leverage resources like the NRF and Reverse Logistics Association (RLA).
  • Network—seek mentorship and education.

• Social/Environmental Impact:

  • Claudia’s EAL Green diverts imperfect inventory—reuse, repair or recycle—with all revenue funding scholarships.
  • “We make imperfect inventory to have social impact...739 college students receiving EAL scholarships from returns.” (54:22)

Notable Quotes & Memorable Moments

• On Opportunity:
  • “It is a very nuanced business and...the dark underbelly of supply chain. So if you don't have passion for it, probably best served go somewhere else.” — Chuck Johnston (13:12)
• On Value:
  • “...returns have never gotten a lot of money is because they can't articulate the value.” — Chuck Johnston (18:02)
• On Fraud:
  • “40% of consumers have admitted that they do a fraudulent return. That speaks to some other things…but it is what it is.” — Chuck Johnston (39:33)
• On Future Careers:
  • “There’s never any better opportunity to get into it now because...it's approaching a trillion dollars...Room at the table for everybody.” — Chuck Johnston (56:20)
• On Technology:
  • “The biggest impact…is that the ability to create an algorithm...at the consumer first decision point to do a return as to where the best path for this needs to be.” — Chuck Johnston (28:05)
• On Education:
  • “We need to see more ambassadors and formal education…mentoring people on that to get into this industry to really drive it.” — Chuck Johnston (49:03)

Timestamps for Critical Segments

| Segment | Topic | Timestamp | |---------|-------|-----------| | Chuck’s Background & Early Days | 06:16–09:05 | | Scale of Returns and Key Challenges | 14:16–18:35 | | Shifting Consumer Behavior | 19:13–20:25 | | Tech Innovations in Returns | 22:00–33:42 | | Circularity: More Returns Debate | 34:27–38:20 | | Fraud and Analytical Countermeasures | 39:33–44:35 | | Persistent Industry Challenges & Education | 45:56–49:33 | | Industry Opportunities & Social Impact | 49:56–54:22 | | Closing Reflections & Takeaways | 55:14–56:25 |

Final Reflections

• Entrepreneurship Abounds: The field is ripe for innovation; no one dominates the space and both hardship and opportunity are everywhere (55:14, 56:20).
• Mentorship Matters: Both Chuck and Claudia stress the need for industry mentorship, passion, and advocacy.
• Social Good: Reverse logistics extends beyond business—it's a channel for measurable social and environmental progress.

Resources & Further Info

• Return Pro: returnpro.com
• EAL Green: ealgreen.org
• Reverse Logistics Association (RLA): rla.org
• NRF (National Retail Federation): nrf.com

This episode is essential listening for anyone interested in the present and future of returns management, reverse logistics, and the intersection of supply chain innovation, sustainability, and social responsibility.