Free returns are often a deal breaker for consumers

Dive Brief:

E-commerce retailers with generous return policies have greater brand loyalty than those with stingier ones, according to a Rithum survey of 6,000 consumers released last month.
Nearly 9 in 10 consumers expect free returns as standard, while 2 in 5 consider a retailer’s return policy before making a purchase.
About half of consumers — 47% — have stopped shopping at a retailer due to an unfavorable return policy. 

Dive Insight:

Returns are essential to e-commerce, with 3 in 5 consumers making one in the past 12 months.

“Returns are no longer a post-purchase afterthought — they’re shaping buying decisions,” Rithum CEO Lou Keyes said in a prepared statement. “For brands and retailers, the return experience has become a critical business lever, not just a logistical function.”

In fact, 84% of consumers are satisfied with the return policies of their most frequented retailers.

Rithum concludes that “this high satisfaction likely reflects consumer self-selection — shoppers are avoiding anywhere with less favorable return policies.”

Shoppers in the United States and Canada have higher expectations than those in other markets, with about 2 in 5 consumers saying that a 30-day return window is reasonable.

Returns, however, cost retailers a lot of money. In 2024, U.S. retailers paid an estimated $890 billion for returns, accounting for 17% of total sales, according to the National Retail Federation. 

“These returns create an expense iceberg for retailers and brands — where the lost sale is just the tip, and hidden costs like shipping fees, manual labor, and thinning margins erode profits beneath the surface,” according to Rithum.

The fashion industry experiences more returns than any other, with over two-thirds of consumers returning clothing or footwear in the past year. More than one-third of consumers admit to buying multiple items to try on and return. That figure rises to 50% for shoppers under age 35.

With deliberate overbuying so widespread, nearly 9 in 10 merchants try to avoid returns through return policy changes like restocking fees, shortened return windows and store-credit-only refunds, according to a 2024 Blue Yonder survey. 

However, apparel shoppers are buying more than they need because they don’t trust product descriptions. Poor fit is the main reason that 3 in 5 consumers return items, according to Rithum. Another one-third of consumers have returned items because they didn’t match their online description or images. 

Better size and fit recommendations, as well as more detailed product descriptions, could help reduce returns, according to Rithum.

“As consumers look to get more for their money, they want to trust that they’ll get what they paid for,” Rithum CMO Suzin Wold said in a news release. “When product content and return policies don’t match the actual experience, it breaks that trust. Today’s shoppers expect accurate, detailed listings — and anything less risks both returns and lost loyalty.”

Electronics, home goods, toys, books and hobby items also have high return rates.

“These purchases tend to be more discretionary, gift or taste-driven, where returns stem less from defects and more from preferences,” according to Rithum.

However, despite the high cost and complexity associated with returns, “return policies are one of the few factors that retailers and brands can fully control,” according to Rithum.

“Returns aren’t going away — but they don’t have to be a revenue drain. By proactively addressing the root causes of returns and rethinking your policies with new consumer expectations in mind, you can better protect margins, boost customer satisfaction, and even stand out in a crowded market,” the survey says.