Adding another layer of pressure is what Egan calls “the culture surrounding e-commerce.” Divorced from the physical experience of seeing an item, touching it or trying it on, “e-commerce shoppers have become accustomed to buying multiple items with the intent of returning some of them,” writes Egan.

The question of whether retailers can recapture any value from returned goods depends on how quickly and effectively they determine within their reverse-logistics processes what to do with the returns, says CBRE. “While the ultimate goal is to resell the item for full price, this can be extremely difficult,” Egan writes. “The key to having the inventory in the right place and at the right time is having an efficient and nimble inventory and supply chain system. Brick-and-mortar retailers have a decided advantage over pure e-commerce retailers by offering in-store returns.”

Although restocking and reselling the returned merchandise recoups the most value, many goods spoil or fall out of fashion before that can happen. Some retailers sell returned goods to liquidators for a lower-value sale but with greater certainty than restocking the item and hoping it sells. The final option is to scrap the merchandise for a total loss.

As return volumes grow, online retailers increasingly have two primary choices. They can add dedicated facilities in their network exclusively for handling returns, which speeds the process and salvages more value from the merchandise. Or they can hire a third-party-logistics firm to handle it for them.

The latter option is growing in popularity, especially among retailers with a less-than-robust supply-chain network, Egan writes. “In the end, the efficiencies gained by outsourcing result in lower costs and more excess-inventory value.” Such 3PL firms, which now occupy a collective 700 million square feet of US industrial space, are expanding at a pace of 3% to 5% annually, according to CBRE.

LOS ANGELES—With double-digit growth each year, e-commerce has represented an increasingly significant share of holiday retail sales in recent years. But as the volume of goods shipped from warehouses increases, the reverse is also true as the goods travel in the other direction. CBRE estimates that the total value of returned goods bought online this holiday season will range from $14 billion to nearly $29 billion, or nearly one-third of the $95 billion in sales volume predicted for 2016 by eMarketer.

A tally like that has major implications for both retail and industrial. Online merchants' ability to recapture the value of returned merchandise depends on their management of reverse logistics. That extends to not only the speed of returns but also the costs associated with receiving them.

“We'll likely see retailers make progress this year in whittling their online return rates because they have more and better data from past seasons to predict what their customers will buy and keep,” says Joe Dunlap, managing director of supply chain services. “Still, big volumes of returns are a fact of life in e-commerce, which leaves retailers with expensive decisions regarding whether to restock, liquidate or destroy returned merchandise.”

In a CBRE Viewpoint report, David Egan, Americas head of industrial & logistics research, notes that returns add “significant costs to retailers and distribution networks that are not optimally equipped for the reverse flow of inventory. It is estimated that returns, either sold at discount or disposed of, cost retailers 4.4% of total revenue each year.”

Adding another layer of pressure is what Egan calls “the culture surrounding e-commerce.” Divorced from the physical experience of seeing an item, touching it or trying it on, “e-commerce shoppers have become accustomed to buying multiple items with the intent of returning some of them,” writes Egan.

The question of whether retailers can recapture any value from returned goods depends on how quickly and effectively they determine within their reverse-logistics processes what to do with the returns, says CBRE. “While the ultimate goal is to resell the item for full price, this can be extremely difficult,” Egan writes. “The key to having the inventory in the right place and at the right time is having an efficient and nimble inventory and supply chain system. Brick-and-mortar retailers have a decided advantage over pure e-commerce retailers by offering in-store returns.”

Although restocking and reselling the returned merchandise recoups the most value, many goods spoil or fall out of fashion before that can happen. Some retailers sell returned goods to liquidators for a lower-value sale but with greater certainty than restocking the item and hoping it sells. The final option is to scrap the merchandise for a total loss.

As return volumes grow, online retailers increasingly have two primary choices. They can add dedicated facilities in their network exclusively for handling returns, which speeds the process and salvages more value from the merchandise. Or they can hire a third-party-logistics firm to handle it for them.

The latter option is growing in popularity, especially among retailers with a less-than-robust supply-chain network, Egan writes. “In the end, the efficiencies gained by outsourcing result in lower costs and more excess-inventory value.” Such 3PL firms, which now occupy a collective 700 million square feet of US industrial space, are expanding at a pace of 3% to 5% annually, according to CBRE.