Customers often overuse return policies. Especially when it comes to the fashion industry. Why not order several sizes and send back the one that doesn’t fit? For consumers, it is ideal. For producers – not so much. While a customer-friendly experience brings new buyers, it can also cause hidden expenses.
In this article, I investigate how returns drain revenue and what can be optimized to reduce their impact on business profitability.
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Problem: Hidden expenses
Returns aren’t just lost revenue. They involve an entire chain of costs: shipping items back to the retailer, new packaging materials and relabeling, human resources, and, finally, delivery to a new recipient (if that’s the case). A report by Retail Economics shows that online product send-backs reached £27bn in the UK in 2024. Serial returners (about 11% of customers!) generate nearly a quarter of all cases.
Rates vary by industry and product type. For food and beverage manufacturers, the issue is less severe: the average figure ranges between 1% and 5%.
Fashion and accessories are an exception. In this segment, items sent back typically account for 26% to 50% of purchases. The serial “returners” mentioned above take advantage of this by turning their own apartments into fitting rooms.
This challenge is not limited to the UK. In 2021, German consumers sent back one in four orders, either partially or in full. In 2024, Germans shipped back approximately 530 million parcels. In Poland, the overall figure is 10% of all online orders, while in the fashion industry it ranges between 20% and 40%.
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By GlobalDataHowever, abandoning this service altogether is hardly a good idea. Doing so risks undermining customer trust, as shoppers will likely choose more convenient options offered by competitors. What else can be done? To understand that, let’s first look at why this happens.
Reason: Why returns happen
Product returns can be triggered by several factors: shopping behavior, inaccurate product descriptions and specifications, operational failures, delivery issues, and more.
According to Coresight Research, size and fit inconsistencies account for the largest share – over 50%. This encourages shoppers to order multiple items with the intention of sending most of them back.
Another common issue is product discrepancies – when the delivered item isn’t what the customer expected and looks different in person than it did on the website.
Overordering, often referred to as “snapping,” further increases return volumes. Customers intentionally order multiple sizes or variations and send most of them back.
Next come operational failures. Incorrectly shipped items, damaged goods, or incomplete orders leave customers with no option but to send purchases back.
Finally, there are delivery issues. Delays, missed deadlines, and unattended parcels all lead customers to abandon or return orders. A Metapack survey shows that 38% of consumers stop shopping with a retailer after a bad delivery experience, even when the product itself matches the description.
By analyzing these reasons, we can conclude that this behavior is predictable and the underlying problems are solvable. The only way to reduce volumes – and the costs associated with them – without damaging customer trust is to eliminate these issues at their source.
Resolution: Reducing operational errors
To reduce returns, you don’t need to make the customer experience less pleasant – you need to discipline your operations. Here are a few tips that have helped my clients.
Accuracy of product information
Close the gap between how a product is presented and what the customer actually receives. Product pages should include accurate measurements and size charts for customers in different countries, where sizing systems vary. Include detailed information about materials and be generous with images.
One successful example of innovation in this area is 3D fitting. Zalando, for instance, introduced an online fitting room in 2024, allowing users to create an avatar and see how clothes look on them. Clear descriptions prevent purchases based on assumptions.
Adjust your return policy
A flexible policy increases conversion, but an overly generous one attracts customers who return items repeatedly. Extending the return period to 45-90 days can reduce impulsive decisions. At the same time, the policy should include safeguards, such as a thorough inspection of the item’s condition. Has it truly been unused?
Ask about return reasons
Offer the most common options to simplify the customer experience, but leave room for customized feedback. Analyze the data and take action based on it.
Use customer reviews
Ratings and reviews help reduce returns. Allow customers to leave comments and upload photos. Reviews also help identify product defects early, giving you the chance to act before issues escalate.
According to a study conducted by BrightLocal, up to 98% of consumers read reviews before making a purchase. Moreover, customers tend to trust companies with a higher volume of reviews, with the average consumer reading around 10 before forming an opinion of trust.
But that’s not all – buyers also pay attention to how brands interact with reviews,” writes Dima Raketa, CEO at Reputation House, for Forbes.
Reviews, therefore, not only reduce return volumes but also increase the likelihood of a purchase. Something to think about.
Improve delivery
Some customers forget to provide their apartment number or phone number. Make these fields mandatory to ensure couriers have complete information. Offer real-time tracking and use delivery confirmation methods such as photos or signatures. Fewer delivery errors mean fewer forced returns.
Use technology to remove friction
Manual processing increases costs and leads to more errors. Specialized systems can track orders, inventory, picking, and product send-backs, helping companies reduce both volumes and costs. This is exactly how Native Commerce works.
The platform synchronizes inventory data, internal policies, picking, and delivery times in real time. It also automates acceptance and processing. Each returned item is assessed based on user-defined rules: its condition, resale priority, and readiness for reshipment. If the product can be resold, it is immediately sent for repackaging, sale, and shipping.
By reducing manual work, Native Commerce lowers labor costs – without stricter policies or limiting customer choice.
About the Author: Marat Bolatov is the CEO and founder of Native Commerce, a London-based company delivering a full-stack eCommerce platform for major retailers across the UK, EU, and MENA.
