Data should be the very first step towards any decision making. This is more important when you are trying to optimise or improve an ongoing process. While it's known to all of us, very few actually practice it and so we end up being stuck at the same place.

The first step towards optimising returns/exchange is to look at why they are there in the first place and the right direction will be to start looking at the reasons for all those returns/exchanges. Before you start looking at the data for returns/exchange, you should define the correct reasons for your customers to choose from and then analyse it to understand the real culprit.

What to do once you know what is causing most of the returns?

Once you have the data pointing towards the real problem, look at ways it can be reduced. Here is an interesting example for merchants selling apparels or fashion wear:
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If most of the returns are caused due to size issue, you should include a Size chart or Size assist on the product page to help them find out the right size before they get to choose the size of their product.