I remember sitting in my office last January, staring at a $42,000 UPS surcharge bill that felt like a punch to the gut. We had just come off a record-breaking holiday season, but when I looked at our net margins, they were thinner than a poly mailer. It wasn't that our marketing was failing; in fact, our CAC was lower than it had been in years. The problem was that we spent more on return labels and "peak season premiums" than we had on our entire retention strategy for the year. I once watched a brand pay $12 in shipping and processing to retrieve a $20 t-shirt—painful, and yet, in the world of high-volume DTC, we just accept this as the cost of doing business. We’ve become hopelessly reliant on carrier infrastructure, bowing to fuel surcharges and residential fees as if they’re an unavoidable tax. We need to stop talking about "optimizing" the label and start talking about the hidden cost of the label itself.
The problem isn't your returns software; the problem is paying a carrier to move the box. While modern platforms automate the "why" of a return, the physical movement of the package remains a massive financial leak. We'll look at how removing the shipping carrier entirely changes your unit economics and protects your hard-earned gross margins.
The State of the Industry: UX is Solved, the P&L Isn't
If you’re running an e-commerce operation in 2025, you probably already have a solid front-end returns experience. Platforms like Loop Returns and Happy Returns have revolutionized the way customers interact with the "un-buy." They handle the exchange logic, the customer portal, and the instant store credit perfectly. For the customer, it’s a dream; for the Ops Director, it’s a sleek digital layer on top of a very expensive physical problem. You’ve likely integrated these with Shopify, ensuring your inventory data remains somewhat sane while providing a high-trust experience.
But here’s where the P&L gets ugly: even with the best UX in the world, the final step in almost every workflow is the generation of a carrier label. Whether that package goes to USPS, UPS, FedEx, or a regional player like Veho, someone is paying for that "last mile" in reverse. We’ve spent so much time asking how to make the return easier that we’ve ignored the fact that the physical transport is eating our lunch. (Yes, I’ve panicked over these spreadsheets too, especially when the "out of area" surcharges start piling up on the quarterly audit).
The Last Mile Problem: Why You Are Still Paying the Carrier Tax
Even when we move toward specialized regional logistics, the core issue remains: carrier reliance. Many brands have turned to veho shipping to solve the localized delivery and return problem. If you’ve asked your team, "what is veho shipping?" you know it’s a crowdsourced "last mile" delivery company that focuses on the consumer experience—specifically in major metros. You might see a ship veho text and think, "Finally, someone is making this personal." They use a veho drivers app to allow independent contractors to handle the "white glove" side of the delivery.
Now the tricky part regarding carrier rates is that even regional specialists still have to maintain veho warehouse locations. When your warehouse management system shows your package left last mile delivery station, that package is still on a truck, burning fuel, and requiring a labor-intensive sort. Whether it’s veho chicago or a national hub for FedEx, you are still generating a label. You are still paying for the box. And you are still paying for the fuel to move that box back to a central facility.
Here’s what most Ops Managers miss: the "convenience" of modern regional carriers doesn't eliminate the shipping fee; it just rebrands it. We tried negotiated rates with FedEx and even regional players in 2023, but the residential surcharges and the "return to warehouse" logistics still killed us. Honestly, shipping a return back to HQ usually makes zero financial sense for any item with an AOV under $80.
Transitioning to "Zero-Shipping" Logistics
Recently, I've seen brands switch to a model that removes the shipping carrier from the equation entirely. They’re moving away from the question of "Which carrier is cheapest?" and toward a model that leverages existing neighborhood infrastructure. It feels like a logistics hack, but it’s actually just common sense for the modern urban environment.
The Hyper-Local Approach: Neighborhood Infrastructure
Imagine a model where the return label simply doesn't exist. Instead of the traditional workflow where you ship veho or USPS, the software directs the buyer to a nearby drop-off spot—perhaps a local storefront or a vetted neighbor in their own community. This is what Closo represents: a neighborhood infrastructure layer.
How it works:
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The buyer initiates a return on the portal.
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The software identifies a local "Hub" (a neighbor or local store) or a vetted local seller within the same zip code.
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The buyer drops off the item—no box, no label, no tape.
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A local seller picks it up directly or accepts it at the drop-off point.
The key differentiator: No shipping labels are generated. No UPS, FedEx, or veho shipping tracking is required because the item never enters the carrier stream. No truck is involved in moving that item from a residence to a sortation center. The inventory stays in the neighborhood, where it can be redeployed or held without the $12–$15 overhead of a carrier move.
Running the Numbers: The Real Cost Comparison
It’s hard to visualize the impact of "zero shipping fees" until you see the P&L impact side-by-side. Most brands assume shipping is an unavoidable tax, but the math changes when you keep items local. When you track your package through a carrier, you’re paying for the privilege of waiting. When you remove the carrier, you’re paying for the result.
Comparison: Standard Return vs. Hyper-Local Recovery
It’s hard to visualize the impact of "zero shipping fees" until you see the P&L impact side-by-side. Most brands assume shipping is an unavoidable tax, but the math changes when you keep items local. When we look at who uses veho to ship, it’s usually brands focused on that high-touch delivery, but even they are starting to realize that the "reverse" leg of the journey needs a more radical solution than just a better driver app.
A question I hear from CFOs often: Is veho shipping legit for large scale?
I get asked this all the time because the regional carrier space is so crowded. Yes, is veho shipping legit? Absolutely. They handle some of the largest DTC names in the country. But the limitation isn't the legitimacy of the carrier; it's the geography. If you have a customer in a rural zone or outside of their primary hubs like veho chicago, you're back to the national carriers. A hyper-local model like Closo’s doesn't care about "zones" in the traditional sense; it only cares about where the next local seller is located.
Ops teams always ask me: Who uses veho to ship in the DTC space?
Typically, you see high-growth brands in the meal-kit space, premium apparel, and personalized goods using them for the outbound "wow" factor. But even these brands struggle with the cost of returns. They find that is ship veho legit as a delivery partner but still a line-item expense on the return side. (Don't ask me about Q1 returns where we tried to use regional players to save 10%—the labor to manage three different regional carriers ended up costing more than we saved in postage).
The Financial Insight: Redefining the "Successful" Return
The shift we’re seeing among elite Ops Directors is a move away from "cost reduction" and toward "cost elimination." If you can remove the label, you remove the most volatile variable in your P&L. Founders are realizing that the most profitable return is the one that never gets on a truck. Every time we generate a veho shipping tracking number, we are admitting that we are willing to lose $10+ of gross margin just to move an object.
But what if the object stays? What if the "last mile" is just a walk to the end of the block? The math on a $25 t-shirt or a $40 beauty product suddenly works again. You aren't just saving the shipping cost; you're increasing the velocity of your inventory. If a local seller picks up that returned item in under 24 hours, it can be back on the "digital shelf" for another local customer before the first customer’s refund has even cleared their bank.
Conclusion: The New Logistics Standard
We have to stop accepting carrier surcharges as a part of our brand's DNA. The legacy of shipping labels is one of centralization—everything must go to a hub, everything must be sorted, everything must be trucked. But the modern DTC brand is decentralized by nature. Our customers are everywhere. Our sellers are everywhere. It’s time our logistics reflected that reality.
Once we cut the carrier out of the return leg, our recovery rate doubled because the inventory never sat in a veho warehouse locations bin for five days. We stopped paying for the movement and started paying for the outcome. The future of logistics isn't a better truck; it's a shorter distance.
If you want to calculate exactly how much you’d save by eliminating return shipping labels, check out the calculator we built. It compares your current carrier spend against a local hub model.
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