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5 strategies to ensure returns don't turn into a nightmare before Christmas

As peak shopping season fast approaches, how can retailers brace themselves for the returns avalanche and ensure it doesn’t impact their bottom line and customer service?

By Caroline Lesley Baldwin, Guest contributor

Last updated February 23, 2024

returns management

The retail supply chain is in crisis. A seemingly never-ending cycle of problems has hit industries across the globe, while retail is suffering from labour shortages, fuel, and raw material cost increases and even shifts in customer demands.

The headlines are screaming out how clothing retailers are overstocked–the last thing retailers need is items coming back to their warehouses. And some are taking dramatic approaches to returns, by telling customers to keep their items or donate them to charity.

But when pureplay fast fashion fashion retailers like Asos, Boohoo and Shein are tempting customers online with speedy delivery and free and easy returns, it’s unsurprising that retailers are having to process more returns than ever before.

Shoppers have become accustomed to swapping drafty changing rooms with harsh lighting for the comfort and privacy of their own home, leading them to ditch their Saturday high-street shopping sprees, and instead regularly browsing on their smartphones. This has led to a trend known as “bracketing”, where shoppers order items in multiple sizes or colours, with the intent to return the surplus. Some apparel retailers are reporting returns rates as high as 40 per cent, according to The EcoAge.

When some specialists are estimating that every return can cost up to £20 to ship, store, quality check, repackage and sell again (and that’s before you consider the negative impact on the planet), this model is becoming unsustainable for many retailers, and some are even moving away from the free returns model to attempt to recoup these costs.

But with a very fragmented high street and a cost of living crisis, the fashion industry is in a race to the bottom and offering free returns is one way to reassure customers to part with their hard-earned cash. Insight from delivery management software provider Metapack discovered that free returns was important to 93% of German, French and UK shoppers, and very important to 60 per cent, so it’s definitely important to offer this service.

So, what can retailers do? The fashion industry may have found itself stuck between a rock and a hard place, but other online retailers must also take a good look at their returns management. Don’t forget just because returns are a pain point for retailers, it shouldn’t mean they should be for customers. We round up the key areas you need to address.

1. Make it easy
Returning an online purchase shouldn’t be complicated. Take an in-depth look at your current process to see where improvements can be made:

– Clearly signpost returns information on your ecommerce site so customers don’t have to hunt for details.

– Utilise solutions such as AI chatbots to automate answers to simpler questions, freeing up agents to tackle more difficult queries.

– Use all your channels—from live chat and AI chatbots, through to mobile, web and stores where applicable—to allow returns and simplify the process for shoppers. Shopify, for example, is making lives a lot breezier for customers by using a Zendesk integration.

– Don’t make customers print anything out to make a return. It’s not environmentally friendly, and it’s an annoying experience. Instead, use QR codes to share relevant information with carriers about the parcel.

– Offer multiple options to physically get the goods back to your warehouse. From Royal Mail and other recognised delivery drop-offs, to at-home pickup. And if you have stores, utilise your estate to avoid items becoming lost in the supply chain and ensure they get back on the shelves quickly. High street fashion retailer Zara is actively encouraging this method–its new policy charges online shoppers £1.95 to use a third party drop-off point, but free if returned to store.

2. Perfect your policy
Nothing is gained from hiding important information in the small print. Make sure your policy is clear and concise and easy to find online. And don’t forget free shipping and a 30-60 day return policy is something to shout about in order to attract new customers.

And if a liberal returns policy doesn’t financially work for your business, provide costs and timelines up front, otherwise this will only create frustration. There’s nothing worse than a customer thinking they had four weeks to return an item, only to find out it was actually 14 days and they’ve missed the cut off.

3. Invest in new technology
Some retailers like Asos are experimenting with augmented reality (AR) technology to encourage customers to make more informed purchasing decisions. AR allows shoppers to virtually try on clothing so they can visualise the outfit on their bodies and reassure them of their purchase.

Retailers like Ikea and Made are also using the technology so shoppers can see what a piece of furniture would look like in their home, leading to a more satisfied shopper who is less likely to return goods. Camera and imaging technology is constantly improving, so expect this to become more commonplace.

4. Data is king
Another way to improve the return rate is to really drill down into your data to offer personalised services. Take a look at personal stylist start-ups like Stitch Fix, which sends a selection of clothes for customers to try on and actively encourages them to return items they don’t like. Every time an order is returned, Stitch Fix learns more about the customer’s preferences and uses this data to create more personalised orders going forward, which hopefully means customers will return less over time.

5. Clear communication
Your customer care team is a vital part of your online strategy. According to Zendesk’s 2022 CX Trends report, 61 per cent of customers would leave for a competitor after just one bad experience. That makes it absolutely critical to create a seamless, easy shopping journey with your brand, including returns.

But even the best returns policies sometimes need an extra helping hand when customers have specific queries. Offering automated online communications and having your customer service team on hand to reassure shoppers is key to converting that sale or maintaining relationships going forward.

There’s no getting away from returns in an online world, but if retailers take away the pain points in the shopping journey for both customers and the business, returns should no longer impact the bottom line.

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