Returns are an inevitable part of e-commerce, but the post-holiday period, promotional events (such as Black Friday), and season changes amplify their impact, surging return rates by 20%, according to Salesforce.
In 2025, shoppers are expected to return $890 billion worth of merchandise, representing nearly 17% of retailers’ annual sales, according to a recent NRF report. This creates a complex challenge spanning customer service, reverse logistics, and inventory management.
Shoppers’ Emerging Return Trends
Buying multiple items with the intent to return - or worse to wear and return - is considered a fraudulent behaviour, also known as bracketing, which has grown among younger people. 51% of Gen Z consumers admit to having done it. (Retail Dive)
Although H&M, Zara and others have tightened their return policies, Gen Z and Alpha customers still expect a satisfactory and easy return process, as they have grown accustomed to as part of their shopping experience. (Retail Dive)
Some categories are more vulnerable to returns, with clothing (24%), shoes (17%) and accessories (12%) on the top of the list in 2024 (Statista). The prevalence of online apparel shopping and an inability to try on items before buying contributes to high return rates in the category, as do consumers’ expectations on issues like fit, colour and fabric. (Retail Dive)
The Retailers’ Response
Charging customers for returns is a practice on the rise, with about 40% of retailers charging return fees compared to 31% last year, according to Narvar, and returning fees ranging from $3.95 to $11.99 deducted from the customer’s refund. Many retailers have also shortened their return windows, especially those with policies longer than 30 days. (Modern Retail)
A Three-pronged Approach to Decrease Returns
There’s no easy fix for returns, but best practices adopted and tested by global brands can inspire businesses to review their return strategies. These approaches focus on the shopping journey before purchase, the customer returns process, and the post-processing of returned merchandise.
Pre-Purchase Fixes
Getting unscrupulous abusers of returns policies out of the system is step number one, and AI and big data can help identify chronic fraudster. Amazon, Target, Zara, Abercrombie & Fitch and others have started to refuse returns from suspected abusers. For example, the notorious outdoors brand REI recently notified nearly 5,000 of its 24 million members, shoppers who had an average return rate of 79% paid $30 for a lifetime membership, that they could no longer take advantage of its generous returns policy because of abuse. (Forbes)
Ordering multiple sizes is common practice for apparel and footwear customers. For a brand, this means putting as much effort into giving consumers more information and tools on sizing, so that they can buy accurately. AI-enhancements for personalised reviews and AI virtual try-on tools are some of the technologies that can help reduce sizing mistakes.
Other chief causes for online returns include damaged items, missing parts, items received too late/not on time and it didn’t match up to the photo/description on the website. These are operational fixes retailers should address. (Forbes)
During The Return
Despite online orders generating most returns – accounting for 53%, the percentage of online returns handled exclusively online is 10%, only slightly higher than the 9% return rate for in-store returns. Interestingly, online and in-store consumers alike prefer to conduct returns in person, called buy-online-return-in-store (BORIS).
Software like Happy Returns can help reduce costs by streamlining the returns process. Customers start online by notifying the vendor, stating the reason for the return, and choosing an exchange, store credit, or refund. They receive a barcode and can either print a return label to mail the item or visit a Return Bar, where printing, packing, and shipping are handled for free. Return Bars, located at many and convenient locations such as Kohl’s, Staples, Whole Foods, and more, accept returns for partners like Amazon, Levi’s, Everlane, Shein, and others. Once Happy Returns receives the item, a credit or refund is immediately made - a key reason why customers favour the BORIS option, plus it eliminates the need for packing.
After The Return
Retailers must decide how to handle returned merchandise. Items in original packaging with labels may go back on shelves after inspection, but many are bundled for liquidators or end up in landfills. The American Productivity and Quality Center (APQC) estimates 45% of returns are resold through outlets, foreign markets, or at different prices. RetailDive notes over 11% of returned apparel ends up in landfills.
It’s important to factor in that consumers are becoming increasingly aware of the environmental impact of returns, including waste from disposed products and emissions from reverse logistics. Retailers are under pressure to address these concerns. Reverse logistics firms help by assessing whether items can be repaired, refurbished, resold, or recycled, providing an eco-friendlier solution.
How Can The Commerce Team Global Help?
A fully optimised website with modern UX, well-designed product pages, and third-party technologies such as membership features and reviews are essential for minimising shopper mistakes at the point of purchase. It also ensures customers have all the information they need, while helping brands gather valuable insights, identify recurring return patterns, and detect fraudulent behaviour.
We are experts in e-commerce technology and implementation, ready to support your brand with the right tech stack and strategy to tackle the return challenge. Get in touch at info@thecommerceteam.com.
