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)