diff --git a/src/ast/nodes/ReturnStatement.js b/src/ast/nodes/ReturnStatement.js
index b869575c1dc..ec9f55889ea 100644
--- a/src/ast/nodes/ReturnStatement.js
+++ b/src/ast/nodes/ReturnStatement.js
@@ -1,4 +1,5 @@
 import Statement from './shared/Statement.js';
+import {UNKNOWN_ASSIGNMENT} from '../values';
 
 export default class ReturnStatement extends Statement {
 	hasEffects ( options ) {
@@ -7,6 +8,6 @@ export default class ReturnStatement extends Statement {
 	}
 
 	initialiseNode () {
-		this.scope.addReturnExpression( this.argument );
+		this.scope.addReturnExpression( this.argument || UNKNOWN_ASSIGNMENT );
 	}
 }
diff --git a/test/function/samples/associate-function-return-values-4/_config.js b/test/function/samples/associate-function-return-values-4/_config.js
new file mode 100644
index 00000000000..b33c6c2d2d2
--- /dev/null
+++ b/test/function/samples/associate-function-return-values-4/_config.js
@@ -0,0 +1,8 @@
+var assert = require( 'assert' );
+
+module.exports = {
+	description: 'Handles empty return statements (#1702)',
+	exports: function ( exports ) {
+		assert.equal( exports.bar, 'present' );
+	}
+};
diff --git a/test/function/samples/associate-function-return-values-4/main.js b/test/function/samples/associate-function-return-values-4/main.js
new file mode 100644
index 00000000000..d157c4ae6ec
--- /dev/null
+++ b/test/function/samples/associate-function-return-values-4/main.js
@@ -0,0 +1,15 @@
+const foo = {mightBeExported: {}};
+const exported = {};
+
+function getFooOrUndefined() {
+  if (Math.random() < 0.5) {
+    return;
+  }
+  return foo;
+}
+
+const returnedFoo = getFooOrUndefined() || foo;
+returnedFoo.mightBeExported = exported;
+foo.mightBeExported.bar = 'present';
+
+export default exported;