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The strategic positioning of online fashion retailers is defined, in part, by how they handle the complex task of managing returns. Although customers demand lenient policies such as free and late returns, tight control of returned items is mandated by the high costs of re-transportation and product value erosion. We model closed-loop fashion supply chains in order to describe, analyze, and optimize the performance of both forward and backward networks, including a secondary market. The model is based on a queueing system that combines the effect of new products entering the network for the first time with returned products entering the network for the second or nth time. We derive a closed-form expression for optimal service rates at both the test and refurbishment facilities and for the optimal return window. We then analyze the economic effects—on supply chain profit—of return rate, multiple looping of the same …