Resilient Supply Chain Podcast: Reverse Logistics as Margin Risk

Episode 126 of the Resilient Supply Chain Podcast, hosted by Tom Raftery, examines why returns and resale can no longer be treated as peripheral retail processes. The guest is Terry Boyle, CEO of Trove, a company focused on returns management and recommerce. The discussion centres on reverse logistics, inventory economics, fraud, data quality, and the strategic role of returns in supply chain resilience. The full episode is available at www.resilientsupplychainpodcast.com

Tom Raftery speaks with Terry Boyle, CEO of Trove, about why reverse logistics, returns management, and recommerce have become critical drivers of supply chain resilience and retail profitability.

The Unmanaged Side of Logistics

The central tension in the episode is clear: forward logistics has been heavily optimised, while reverse logistics remains under-managed, manual, and financially opaque. Boyle argues that companies have refined sourcing, transport mode, carton sizing, fulfilment design, and outbound processes to a high degree, yet often leave returns operating through spreadsheets, workarounds, paper labels, and inconsistent judgement.

That gap matters because returns are no longer a marginal operational issue. With online return rates often far higher than store returns, especially in apparel and footwear, the cost of getting products back, processing them, assessing condition, and routing them correctly is becoming a material supply chain concern. As Boyle puts it, “Almost nobody focuses on the reverse logistics.”

Margin Recovery and Inventory Governance

The episode reframes returns as a governance and margin recovery problem. Returned inventory can move back to full-price stock, resale, off-price channels, repair, recycling, or disposal. The quality of that decision determines whether value is recovered or lost.

Boyle identifies several areas where value leaks: labour cost, slow return-to-stock processes, imperfect inventory being liquidated too late, poor routing to resale or off-price channels, and fraud. One striking example is returned goods being placed on pallets because no one knows what to do with them, only to be liquidated months later for a fraction of their potential value.

This is not simply a fulfilment issue. It affects finance, product development, merchandising, customer service, sustainability, and supplier accountability. A product returned for repeated defects, poor fit, packaging damage, or supplier-related quality issues is also a data signal. If those signals are not captured at item level, the organisation loses visibility into recurring failure modes.

Data Integrity Before Automation

The conversation also challenges easy assumptions about artificial intelligence in supply chain operations. Boyle is positive about AI and computer vision, particularly for condition grading and quality assurance, but he is careful about the limits. Human assessors may already be accurate 90 to 95 percent of the time in condition grading, meaning automation must meet a high operational bar before it can take over.

The more immediate issue is data integrity. Customer-reported return reasons are often unreliable because customers want to ensure the return is accepted. That creates a weak foundation for decisions about design, sizing, supplier quality, and inventory strategy. Better returns data can help identify style-level problems, factory-specific defects, abnormal return patterns, and fraud risk.

Sustainability Through Economics

A further theme is the relationship between sustainability and commercial decision-making. Boyle argues that circularity is more likely to scale when positioned as better inventory economics rather than climate action alone. That does not reduce the environmental relevance of resale or repair, but it changes the path to adoption. “For the average brand, it’s nice, but not sufficient,” he says of sustainability as a primary driver.

The strategic takeaway is that reverse logistics sits at the intersection of margin, resilience, data, governance, and sustainability. As returns volumes rise and cost pressures intensify, senior leaders will need to treat post-sale operations with the same discipline applied to forward logistics. The companies that do so will gain better visibility, faster decision-making, stronger controls, and a more credible route to circularity.