How to Send a Prepaid Return Shipping Label via USPS

In the world of e-commerce, a return isn't just a lost sale—it's a crucial touchpoint that can either build lifelong loyalty or drive a customer away forever. Data shows that over 34 percent of shoppers expect a prepaid return label to be included right in the box, yet many small businesses worry about the upfront costs of providing this convenience. With Shippo, you can bridge that gap by offering scan-based USPS return labels. This means you can provide the professional experience of a "prepaid" label without actually paying a dime unless the customer decides to send the package back, ensuring your cash flow stays protected while your customer service shines.

What is a Prepaid Return Shipping Label?

A prepaid return shipping label includes the sender and recipient address for the package, plus proof of the paid postage and a barcode for the mail carrier to scan the package into the mailstream. 

The good news is: you don’t need to prepay for a prepaid return shipping label. With an easy-to-use shipping software like Shippo, you can create scan-based return labels, so you are only charged for the postage if and when the return label is scanned into the mailstream. That way, you can avoid the costly overhead of prepaying for return labels for all of your customers and then requesting refunds if and when the labels are not used.

You can use your shipping solution to create a PDF of the label and email this return label to your customer. Therefore, if she wants to return a product, all she has to do is print it and paste it on the return package. Alternatively, you can print it for her and include it in the box and then all she has to do is paste it on the return package.

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The Smart Way to Manage Returns

The biggest misconception about prepaid return labels is that they require an immediate investment. By using scan-based labels through a platform like Shippo, you only incur the postage cost if and when the carrier actually scans the package into the mailstream. This "pay-on-use" model allows you to include a return label in every outbound shipment or email one on-demand without risking your budget on unused postage. It’s a low-risk, high-reward strategy that eliminates the friction of the return process for the customer while keeping your fulfillment costs predictable.

Additionally, providing these labels gives you more control over the return journey. Rather than leaving the customer to navigate the post office on their own—which often leads to expensive, non-discounted retail rates—you can ensure the return travels via your preferred, discounted USPS service level. You can even choose to deduct the label cost from the final refund, allowing you to offer a "hassle-free" return experience that doesn't necessarily eat into your bottom line.

How Sending Prepaid Return Shipping Labels Helps You Grow Your Business

The same UPS report mentioned that 58 percent of customers, “say free shipping is key to a positive returns experience,” and 53 percent of shoppers could still be satisfied with your business even if the product isn’t a good fit for them when it’s easy to send the product back.

Source: UPS

Even if the current purchase didn’t work out, making customers’ lives easy and convenient could result in them giving you another chance, and likely even becoming advocates for your brand by spreading the word.

Your Step-by-Step Guide: How to Send a Prepaid Return Shipping Label via USPS

Create an Outbound Label and a Return Shipping Label at the Same Time

You can create a return shipping label at the same time as the outbound label using a USPS shipping software like Shippo. If you’ve already created the outbound label, feel free to skip to the next section of the article. Otherwise, to get started, go to the Orders tab in Shippo.

 For this demonstration, we created a sample order that we want to ship to Wonderful Customer.

If you look to the right of Wonderful Customer’s name, you’ll see a green button that says Create Label. Click on it.

Add the package’s dimensions and weight, as well as the recipient and sender’s addresses.

Then, choose a shipment date for the outbound label and mark the box that says Also create a return label. 

Next, click on the green button at the bottom, that says Select Shipping Rates.

Shippo will search for the best rates for you.

Choose the combination that works best for you, click the green Buy Label button, and insert your credit card information. Please note: this is only the cost for the outbound label. If and when the return label is used, you’ll be charged the same amount again for the return label. 

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Create a Prepaid Return Shipping Label for an Existing Outbound Label 

If you choose not to include a return shipping label in the outbound package, you can always create one later if a customer requests one. To get started, click on Orders on the left sidebar menu. 

You’ll see your list of orders with buttons saying Create Label or Print Label. If the button is green, you first need to create your outbound label, so go back to the previous section of this article, and follow the steps. If the button is blue, it means you’ve already created an outbound label inside Shippo, and if it’s grey, it means you’ve created the label outside of Shippo.

If the button is blue or grey, you can create a standalone scan-based return label. Choose one of the orders, and click the arrow button next to the Create Label or Print Label text, then click on Create Return Label.

Make sure the Pay When Shipped box is checked.

USPS scan-based return labels expire after one year, so the shipment date isn’t crucial here, but if you use other carriers, like FedEx, your label will expire after 30 days.

Next, click Select shipping rates. 

Sending a USPS Prepaid Shipping Label is an Easy Way to Serve Both Your Customers and Your Business Well

Whether or not a customer chooses to return a product, she will know it’s safe and easy to purchase from you, and is likely to help you spread the word about your business. Even if this current purchase isn’t the best fit, handling it with high-quality service can encourage her to give you a second chance, thus opening the door to a potential long term relationship.

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