What is a good example of returning? What does returning do exactly?

Returning inside a function basically makes it stop and return a value that can be attributed to a variable

Lets say that I have this function:

function getRandomPlayer()
    local players = game.Players:GetPlayers()
    local selected = players[math.random(1, #players)]

    return selected
end

local plr = getRandomPlayer()
print(plr.Name)

In that case, we are calling a function that use return to "export" a variable from inside it.

Another way to use return is to stop a function from running:

local check = false

function func()
    if not check then
        return -- stops the function if variable is false
    end
    print("Function running...")
end

func()

If this helps, please upvote and mark this answer as accepted

Returning is used to send informations back to where the function is called, here is an example:

local function sayHi()
    return "Hi!"
end
-- Print returned value of sayHi
local returnedValue = sayHi()
print(returnedValue)

Here is the expected output:

Hi!

You can also return using integers, as well as performing arithmetics.

local function multiply(x, y)
    return x*y
end

local returnedValue = multiply(5, 5)
print(returnedValue)

25

Returning is very simple and easy to learn. Quick Recap: Returning is used to send informations to where the function is called, so whatever your returned value is, that value will get sent.

Returns are basically what you can get out of a function. Let's compare it to going to the store and paying for an item.

local function giveMoney(money)
    if money >= 10 then
        return "Some sweet shoes!"
    end
end

giveMoney(10)

In the function giveMoney, it checks for the amount of money given. The example shows that you gave the function (or shopowner) 10 dollars. Since the shoes are 10 dollars, you are given some sweet shoes. Once that happens, you can show them off!

local function giveMoney(money)
    if money >= 10 then
        return "Some sweet shoes!"
    end
end

local shoes = giveMoney(10)
print(shoes) -- Some sweet shoes!