Exchanges defaulting to refunds and lost upsell on size/style swaps

$15,000–$25,000 annually per $1M in online apparel sales (lost upsell + margin dilution; refunds replace higher-margin exchanges and upgrades) • $18,000–$28,000 annually per $1M in children's apparel sales (children's clothing has 28–35% exchange rate; each default refund loses $30–$80 upsell opportunity and future purchase) • For every $1,000,000 in online apparel sales, $15,000–$25,000 in annual revenue is lost because size/style exchange intent is converted to refunds instead of keeping the basket value or upselling during the exchange flow.

District Manager exports transaction data to Excel, manually pivot-tables exchange vs. refund volume by store, cross-references with customer feedback tickets, escalates anomaly to regional or corporate operations. Workaround: weekly phone calls with store managers to manually validate numbers • Sales Associate manually records exchange request on sticky note or paper ticket, attempts to process through returns portal, portal forces refund workflow, Associate processes refund instead. Workaround: phone call to store manager for manual override or adjustment • Teams try to salvage exchanges manually after a refund request by intervening via customer service: emailing or calling the shopper to suggest a different size/style, creating manual replacement orders in the OMS, and reconciling inventory and payments outside the core returns workflow.