The accelerated growth of e-commerce, propelled by consumer demand for convenience and shifting consumer trends, has resulted in an increase in product returns. These returns are increasing costs thus forcing retailers to put returns management systems in the forefront. In addition, these higher volumes in returns from e-commerce have gained attention of the circular economy, therefore, highlights the need for a comprehensive understanding and the development of efficient returns management system in a generation of digitalization. While these systems can increase value recovery of products and services, they play a critical role in advancing sustainability goals. This convergence between digital and environmental transition leads to a twin transition to create a strategic alignment of digital and green innovations. This can help retailers foster not only operational efficiency but also a circular economy for long-term supply chain resilience in returns management. As there is a need for more research within the twin transition field, this research addresses the gap of having strategic alignment of digitalization and a circular economy as these two fields have often been seen as fragmented but are key drivers in an efficient returns management system.