14 Jan
Did you know that nearly 30% of all products bought online are returned, compared to just 8.89% from brick-and-mortar stores? This staggering difference highlights a critical challenge for ecommerce businesses. In this blog, we’ll explore the latest ecommerce returns statistics, understand why returns are prevalent in ecommerce, and provide actionable strategies to reduce return rates and boost customer satisfaction.
Why Your Ecommerce Business Needs a Returns Policy
If you want your customers to have the best experience at your ecommerce store and ensure they come back for repeat purchases, you need to offer convenient and hassle-free returns. A customer-centric returns policy not only builds trust but also directly influences purchasing decisions. When shoppers feel confident that returns will be easy and free of hassle, they are more likely to complete a purchase.
Online shopping significantly differs from in-person shopping. Ecommerce buyers cannot see the product in real life, test its fit, feel its material, or verify its color accuracy before purchasing. As a result, the return rates for online stores are much higher than in physical stores. Without a lenient returns policy and efficient returns processing, customers may hesitate to make purchases, fearing a difficult return process if the product doesn’t meet their expectations.
Implementing a robust ecommerce fulfillment strategy and utilizing order fulfillment services in Europe can ensure customers receive their products accurately and on time, reducing the likelihood of returns. By adopting just-in-time stock control, businesses can maintain optimal inventory levels, ensuring product availability and reducing shipping errors, which further decreases the chances of returns.
Building a strong returns policy is not just about handling returns efficiently; it’s about creating a seamless customer experience that fosters loyalty. When customers know they can return a product without penalty or hassle, they are more likely to trust your brand, leading to repeat business and positive word-of-mouth referrals. This trust is especially crucial in an era where online competition is fierce, and customer reviews significantly impact brand reputation.
General Ecommerce Returns Statistics Over the Years
Understanding overall return rates and trends can help ecommerce businesses plan their strategies effectively. Here are some key statistics that highlight the landscape of ecommerce returns:
- Average Return Rate: The average ecommerce store return rate is 18.1% (NRF, 2024). This figure can vary by industry, but it serves as a benchmark. A return rate lower than 10% is generally considered positive, while rates over 60% can indicate significant issues in product quality, fulfillment processes, or misaligned customer expectations. Keeping this metric low through on-time, accurate deliveries and precise product descriptions is crucial for profitability.
- Damaged Products: 80.2% of orders are returned because the product is damaged or broken (Charlton, 2024). This statistic underlines the importance of investing in proper packaging, quality storage, and careful handling during the picking and packing processes. Each step in the fulfillment process—from warehouse to delivery—must be monitored and optimized to minimize the risk of damage.
- Free Return Shipping: 49% of retailers offer free return shipping (Tran, 2024). Free returns reduce purchase hesitation, making customers more comfortable shopping knowing they won’t bear return costs. By absorbing the cost of returns, retailers often see an increase in customer loyalty and repeat business, as consumers feel valued and supported by the retailer.
- Pandemic Impact: Compared to 2019, return rates increased by 70% in 2020 (The Wall Street Journal, 2024). The surge in online shopping during the pandemic led to a spike in returns, as consumers experimented with new products, sometimes ordering multiple sizes or variations to ensure they found the right fit. As the ecommerce market expanded rapidly, so did the complexity of managing returns efficiently.
- Online vs. In-Store Returns: Online returns made up the majority of overall returns, and rates doubled in 2021 (NRF, 2024). Shopping risks online, like size or color discrepancies, contribute to these higher return rates. Unlike brick-and-mortar stores where customers can inspect and try products, ecommerce shoppers often rely solely on descriptions and images, leading to mismatches between expectation and reality.
- Return Percentage by Channel: 30% of products bought online are returned compared to 8.89% of in-store purchases (Investopedia, 2024). While ecommerce returns remain higher, targeted strategies can bring these figures down. Retailers can learn from physical stores by incorporating tactile experiences, virtual try-ons, and detailed customer reviews to reduce uncertainty.
- Ecommerce Sales Forecast: By 2025, ecommerce sales are projected to account for 24.5% of all global retail sales (Statista, 2024). This continued growth emphasizes the importance of effective returns management for profitability. As more businesses move online, the volume of returns will likely increase, making it essential to have scalable, efficient returns processes in place.
- Economic Impact: In 2021, retailers worldwide lost 218 billion USD due to ecommerce returns (O’Brien, 2024). These losses encompass not only the value of the returned products but also the costs associated with processing returns, restocking, refurbishing, and shipping. Efficient return management strategies can mitigate these losses, preserving revenue and resources and converting potential financial drains into opportunities for customer re-engagement.
Global Online Consumer Behaviour Regarding Ecommerce Returns
Understanding consumer expectations and behaviors is key to creating a seamless returns experience. Here are some insights into global consumer behavior regarding ecommerce returns:
- Impact of Bad Experience: 84% of UK shoppers will not purchase from a retailer again after a bad returns experience. This finding underscores the importance of providing a smooth returns process to build long-term customer relationships (NRF, 2024). Word-of-mouth and online reviews often spread faster than traditional marketing, so a single negative return experience can have widespread repercussions.
- Return Windows: 62.58% of online customers expect retailers to allow returns within 30 days of purchase. Extending return windows builds trust, giving customers enough time to evaluate their purchases and decide if they meet their expectations. A generous return period can reduce the feeling of risk associated with online shopping, encouraging more frequent purchases.
- Seasonal Trends: A large majority of returns occur in January as customers process holiday gifts. Retailers must prepare for increased return volumes during this time (NRF, 2024). To manage this seasonally high influx, businesses should plan for additional staffing, streamlined processes, and clear communication with customers about return procedures.
- Omnichannel Returns: About two-thirds of online shoppers are more likely to purchase if they can return products to a physical store (Investopedia, 2024). Offering brick-and-mortar return options can increase customer loyalty and sales by blending the convenience of online shopping with the reassurance of an in-store return option. This strategy not only appeals to customers but also provides an opportunity for upselling and in-person engagement.
- Hassle-Free Policies: 58% of online shoppers want a “no questions asked” returns policy (Investopedia, 2024). A simple, straightforward process meets this demand and enhances satisfaction. By eliminating barriers to returns—such as lengthy forms, shipping costs, or complex procedures—retailers can create a more positive shopping experience that encourages repeat business.
- Overbuying Habit: 30% of shoppers overbuy and return unwanted items intentionally (Barclaycard, 2024). This behavior poses logistical challenges for retailers, including the need to process multiple returns for a single customer order. By analyzing purchase patterns and offering tools like virtual try-ons or detailed reviews, businesses can help customers make more informed decisions, potentially reducing the tendency to overbuy.
- Importance of Return Policy: 67% of shoppers read a store’s return policy before purchasing (Investopedia, 2024). Clear, accessible policies influence buying decisions, making transparency essential. A well-articulated return policy not only informs customers but also sets clear expectations, reducing confusion and dissatisfaction later in the process.
These behaviors underline the importance of crafting a returns process that is both customer-friendly and efficient. Retailers who succeed in this area will likely see increased customer loyalty, reduced operational costs, and a stronger competitive position in the market.
Ecommerce Return Statistics by Global Marketplaces and Platforms
Different ecommerce platforms exhibit varying return rates influenced by their policies, product selection, and customer base. Here are some key statistics and insights specific to major platforms:
- Amazon’s Return Rate: The average return rate on Amazon is between 5% and 15% (Williams, 2024). While Amazon’s lenient return policy encourages consumer confidence, it also leads to a higher volume of returns. Amazon’s robust logistics and return process provide a model for other retailers, emphasizing customer satisfaction while managing returns efficiently.
- Reasons for Amazon Returns:
- 10% of returns occur simply because shoppers did not like the product once they received it (Narvar, 2024).
- 34% of returns are due to wrong color, fit, or size issues (Narvar, 2024).
- These figures suggest that despite careful selection and detailed descriptions, a significant percentage of returns still occur due to subjective preferences or misjudgments. Retailers should focus on improving product representation and offering easier methods of exchanging products to address these issues.
- Detailed Return Reasons: Amazon provides a list of 72 official reasons for return, allowing for detailed tracking and improvement measures (Williams, 2024). By capturing granular data on why customers return items, Amazon can identify trends and areas for improvement. Ecommerce businesses can adopt a similar approach to categorize return reasons, streamline processes, and implement targeted solutions.
- Impact of 3D Visualization: According to Shopify, there has been a 40% decrease in returns since implementing 3D product visualization (Wizeline, 2024). Enhanced visualization helps customers make informed decisions, reducing returns due to misunderstandings about product appearance or functionality. This technology not only improves customer satisfaction but also reduces the operational burden of managing returns.
- Ease of Amazon Returns: 61% of online shoppers claim it is easy to return an item bought on Amazon (Williams, 2024). This ease sets a benchmark for other retailers aiming to improve their returns processes. The ability to quickly and effortlessly return products can transform a potentially negative experience into a positive one, strengthening customer trust in the brand.
- Innovative Solutions: A Swedish startup, Returnado, converts 30% of returns into exchanges by efficiently managing the returns process (BBC, 2024). Such innovations can reduce costs and improve customer satisfaction by offering alternatives that satisfy customer needs without the need for a complete refund and repurchase process. Encouraging exchanges rather than returns can be a win-win for both retailers and consumers.
- Alibaba’s Policy: In December 2020, Alibaba revealed that 85% of all products on its marketplace will be eligible for returns (Post & Parcel, 2024). This wide return eligibility reflects Alibaba’s commitment to customer service and trust. Other marketplaces can learn from this approach, expanding their return policies to instill greater confidence in potential buyers.
By studying the practices of global giants like Amazon and Alibaba, smaller retailers can adopt best practices and adapt them to their own scale. Investing in systems that capture return reasons, improve customer communication, and simplify processes will pay dividends in reducing return rates and improving margins.
Ecommerce Returns Statistics by Product Categories
Return rates vary significantly by product category, and understanding these differences can help tailor strategies:
- Low Return Categories: In the U.S., only 8% of music, movies, books, and games purchased online were returned in 2021 (Statista, 2024). These items typically have fewer variables like fit or comfort, which reduces the likelihood of returns. However, even in low-return categories, factors like damage during shipping or misrepresentation can lead to returns, so quality control remains important.
- High Return Categories – Clothing and Shoes:
- Clothing: Clothing has the highest return rate among ecommerce purchases (Statista, 2024). In 2021, clothing items made up 26% of all returned products in the U.S. High return rates in fashion are often due to sizing issues, fit discrepancies, color variations, and style preferences.
- Apparel Market Challenges: Some apparel markets face return rates as high as 50% (ShopifyPlus, 2024). Challenges include customers ordering multiple sizes or styles to try at home and returning those that don’t work, difficulty in visualizing how clothes will fit without trying them on, and variations in fabric quality that aren’t apparent online.
- Shoes: Shoes rank second in return rates due to uncertainties in fit, comfort, and appearance. Buyers can’t try shoes on before purchase, leading to higher dissatisfaction rates if the shoes don’t match expectations.
Implementing 3D visualization and augmented reality (AR) solutions can help customers better understand products like clothing and shoes, reducing return rates. These technologies provide a virtual try-on experience, improving the accuracy of fit and style decisions. Additionally, accurate size charts, detailed product descriptions, and high-quality images contribute to lowering returns by setting correct expectations.
Businesses in high-return categories should also consider flexible exchange policies, personalized style recommendations, and customer reviews with photos to reduce uncertainty. By leveraging customer data and advanced analytics, retailers can suggest better-fitting items or alert customers to potential issues with sizing, thus minimizing returns.
Why Online Shoppers Will Return Products
Understanding why returns happen can help businesses prevent them and improve customer satisfaction. Here are the primary reasons shoppers return products, along with strategies to address each issue:
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Incorrect Items:
- Statistic: 23% of online shoppers receive wrong items (Investopedia, 2024).
- Solution: Implement just-in-time stock control and rigorous quality checks to reduce fulfillment errors. Regular training for picking and packing staff, along with technology like barcode scanners and inventory management software, can reduce mistakes.
- Damaged Goods:
- Statistic: 20% of orders result in damaged or broken goods (Investopedia, 2024).
- Solution: Use high-quality packaging materials, provide clear handling instructions, and partner with reliable shipping carriers. Implement robust quality assurance processes to inspect products before shipping.
- Discrepancy in Appearance:
- Statistic: 22% of shoppers return items that look different in real life than on the website (Investopedia, 2024).
- Solution: Incorporate 3D visualization and AR, offer detailed product images from multiple angles, and include videos demonstrating product usage. Accurate color representation and customer-uploaded images in reviews can also help set realistic expectations.
- Late Deliveries and Other Reasons:
- Statistic: 35% of returns stem from late delivery or various other issues (Investopedia, 2024).
- Solution: Partner with dependable fulfillment centers to ensure timely deliveries. Provide customers with real-time tracking updates and transparent communication about delivery times. If delays occur, proactively communicate with customers and offer compensations or apologies to maintain goodwill.
By addressing these root causes, businesses can create a more reliable and satisfying shopping experience, which in turn reduces the frequency of returns.
The Need for a Robust Returns Policy and Strategy
Given the high return rates and their impact on revenue, it’s essential for ecommerce businesses to develop a robust returns policy and strategy:
- Lenient and Hassle-Free Policies: A clear, no-questions-asked returns policy builds trust, encourages purchases, and improves customer retention. Customers are more likely to buy when they know that a difficult returns process won’t hinder them if they are dissatisfied.
- Accurate Product Representation: High-quality images, 3D visualizations, detailed descriptions, customer reviews, and comprehensive FAQs reduce the likelihood of returns due to mismatched expectations. The more information available before purchase, the lower the probability of returns.
- Efficient Fulfillment Processes: Partner with reliable 3PL providers and leverage services like Shopify 3PL Ireland to ensure accurate and timely deliveries, minimizing errors, damaged goods, and delays. Efficient processes not only reduce returns but also increase overall customer satisfaction and repeat business. For example, utilizing UK Fulfillment Services can streamline operations and improve service quality for customers in the UK.
- Data-Driven Insights: Use detailed reasons for return tracking (like Amazon’s 72 reasons list) to identify patterns and implement corrective measures. By categorizing return reasons, businesses can pinpoint issues in product quality, descriptions, logistics, or customer service and take targeted actions.
- Customer Feedback: Engage with customers post-return to gather feedback, understand their pain points, and improve the shopping experience. Surveys, follow-up emails, and review requests can provide valuable insights into what went wrong and how to prevent it in the future.
A robust returns policy and strategy should integrate seamlessly with the rest of the business operations, ensuring that returns management is not an afterthought but a core component of customer service and logistics planning.
Actionable Strategies to Reduce Return Rates
Based on the statistics and insights above, here are actionable strategies to manage and reduce return rates:
1. Improve Product Descriptions and Visuals:
- Use 3D product visualization and AR to give customers a realistic view of the product.
- Provide accurate size charts, color descriptions, and material details.
- Include customer-generated content like photos and videos to showcase products in real-world scenarios.
2. Enhance Packaging and Shipping:
- Invest in high-quality, appropriate packaging materials to reduce damage.
- Implement rigorous quality control during the picking and packing process.
- Choose reliable shipping partners with good track records for handling fragile items.
3. Offer Flexible Return Options:
- Provide free return shipping and extend return windows (at least 30 days).
- Allow returns at physical locations where possible for a more convenient experience.
- Simplify the return process with clear instructions, pre-paid labels, and easy drop-off options.
4. Streamline the Returns Process:
- Create a user-friendly returns portal with clear instructions.
- Use technology to simplify returns, such as online return labels, automated refunds, and efficient customer service response times.
- Offer instant exchanges or credit options to satisfy customer needs without lengthy return cycles.
5. Leverage Data and Analytics:
- Track return reasons to identify common issues.
- Use insights to adjust inventory, product offerings, and quality controls.
- A/B test different strategies on product pages to see what reduces returns.
6. Partner with Experts:
- Utilize fashion ecommerce fulfillment services for apparel-specific challenges.
- Engage with omnichannel ecommerce fulfillment partners to manage returns across various sales channels.
- For startups and SMEs, consider partnering with providers specializing in fulfillment services for startups in the UK or ecommerce order fulfillment solutions. This helps leverage industry expertise, cutting-edge technology, and streamlined operations without the overhead of building your own infrastructure.
7. Educate Your Customers:
- Provide size guides, style tips, and product care instructions.
- Send follow-up emails with helpful tips after purchase to reduce the chance of returns due to misunderstanding product use.
- Encourage customers to reach out with questions before purchase to clear doubts.
By implementing these strategies, ecommerce businesses can not only reduce their return rates but also improve overall customer satisfaction, streamline operations, and protect their bottom line.
Conclusion and Next Steps
In summary, understanding the factors driving high ecommerce return rates and implementing a robust, customer-friendly returns policy are critical to success. By leveraging cutting-edge technology, partnering with reliable fulfillment experts like Meteor Space, and continuously analyzing return data, you can reduce return rates, save costs, and improve customer satisfaction.
As ecommerce continues to grow—projected to reach 24.5% of global retail sales by 2025—the importance of effective returns management cannot be overstated. Retailers who invest in optimizing their returns processes stand to gain a competitive advantage, foster deeper customer loyalty, and increase profitability.
Are you ready to optimize your returns process and boost your ecommerce business? Contact us today to learn how our comprehensive order fulfillment and returns management solutions can help you achieve greater efficiency and customer satisfaction.
Author:
Colleen Ballantine
Colleen is a marketing specialist at Meteor Space , writing in-depth blog content on warehouse management, inventory control, and logistics. With extensive industry experience, Colleen focuses on delivering informative and insightful posts
UPDATED ON: 14th Jan 2025
