Purpose: The use of reverse logistics has received increased attention in the literature, although the role that reverse logistics capabilities plays in enabling firms to achieve cost savings has not been empirically examined. Reverse logistics capabilities can enable retailers to enhance their return policies and improve their overall cost position. This paper aims to address these issues. Design/methodology/approach: Based on a survey of 295 retailers, this paper evaluates the influence of customer and retailer related antecedents of reverse logistics capabilities and their subsequent impact on cost savings. Findings: The results indicate that resource commitments and contractual obligations positively influence reverse logistics capabilities and that these capabilities result in cost savings. Customer opportunism is found to be negatively related to reverse logistics capabilities. It is also reported that reverse logistics capabilities partially mediates the relationship between resource commitments, contractual arrangements, and reverse logistics cost savings. Originality/value: This work builds on the recent research in reverse logistics; however, unlike other contributions in this research stream, the role of retailers who perform a critical role in this area is addressed. © Emerald Group Publishing Limited.