Bringing Apparel Returns Under Control: Inventory Accuracy Rises from 88% to 97%

For a Delhi NCR apparel brand selling through Myntra, Ajio and its own D2C website, returned garments were becoming an operational bottleneck. Uninspected stock accumulated, sellable pieces became mixed with damaged items and delayed credit notes added pressure to cash flow. AAJ introduced a dedicated returns processing bay with barcode tracking, quality checks and immediate segregation, creating a clear route from receipt to restocking or further action.

The brand was managing a return rate of 35% across its sales channels, but lacked a structured process for handling garments once they arrived back at the facility. Returns accumulated without timely inspection, delaying decisions about which items could be sold again.

The growing backlog affected both inventory control and financial processing:

• Uninspected returns: Garments remained pending assessment instead of moving promptly towards restocking, repair or write-off.
• Mixed stock conditions: Sellable pieces became mixed with damaged garments, making usable inventory harder to identify.
• Declining inventory accuracy: Inventory accuracy had fallen to 88%, weakening confidence in recorded stock availability.
• Delayed credit notes: Credit note processing took two to three weeks, adding pressure to cash flow.

The brand needed a repeatable returns workflow that could identify each incoming item, establish its condition and connect the physical handling process with accounting.

AAJ established a dedicated returns processing bay at its facility, giving returned garments a defined handling area and a consistent inspection process. 

The operation center on five actions:

• Three-step quality control: Every return moved through receipt, inspection and grading to determine its condition and next action.
• Barcode identification on arrival: Each returned item was barcoded when received, providing an identifiable record for processing.
• Immediate condition-based segregation: Sellable, repairable and write-off garments were separated to prevent stock from being mixed.
• Accounting integration: Credit note generation was integrated with the client’s accounting system to support faster financial processing.
• Video evidence for disputes: CCTV footage covering a 90-day period was made available to support contested marketplace returns.

Garments graded as sellable were restocked immediately after inspection, returning usable inventory to the sales pool.

Returned garments were processed within 24–48 hours of receipt. Sellable items could therefore return to available inventory promptly, improving fill rate and reducing lost sales associated with out-of-stock situations.

Inventory accuracy increased from 88% to 97%—an improvement of nine percentage points. Immediate segregation also brought incidents of sellable and damaged stock being mixed to zero.

Credit note turnaround fell from three weeks to three days, shortening the delay that had been placing pressure on cash flow.

The availability of 90-day CCTV footage also strengthened the brand’s evidence for contested returns. Marketplace return-claim dispute win rates improved significantly, although no quantified improvement was supplied.

The structured workflow gave the brand a more reliable way to recover value from returned garments. Sellable pieces could move back into inventory promptly, while repairable and write-off items remained clearly separated.

More accurate inventory records supported better stock availability decisions across Myntra, Ajio and the D2C website. Faster credit note processing also addressed a financial bottleneck, while accessible video evidence strengthened the handling of marketplace disputes.

Together, these changes established a repeatable process for managing ongoing returns, helping the brand maintain control over stock condition, inventory records and credit note turnaround.