The recent global economic recession has forced many business firms to increase efficiency, cut waste and invest in innovation in order to sustain competitiveness. The purpose of this study is to explore how firms handle their returns processes, an area which can impact on competitive advantage. The research focuses on short life-cycle products. The study used case study methodology, conducting in-depth interviews with key logistics managers in four companies. The findings revealed that, although each company had different emphasis in handling product returns, three key drivers, namely information technology, knowledge sharing and relationship networks, had positive impacts on its reverse logistics capabilities and consequently on their competitive advantage.