Best Tactics to Handle Ecommerce Returns in 2025 (with real Statistic)

eCommerce returns seem like a nightmare to any online retailer, as it leads to undesirable workload, incurs inconvenient hidden costs, and adversely affects product margin. While product returns have gradually become a new normal in the age of online shopping, it’s essential to understand that returns can’t be avoided completely. In fact, the way you prepare for eCommerce return, before and after purchase, can make a difference and help your brand stand out. In this article, we will look at the latest eCommerce return rate statistics and discover the best practices to help product returns become your competitive edge. 

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Why eCommerce customers return purchased products?

Product Does Not Meet Expectations

Many returns in eCommerce occur because the product received does not match the customer’s expectations based on its description or images online. This includes discrepancies in quality, appearance, or functionality. For instance, if a customer orders a product expecting a specific feature (like an OLED TV) and receives something different, they are likely to return it.

Sizing or Fit Issues

Particularly prevalent in the fashion and footwear industries, size-related returns account for a significant portion of eCommerce returns. Customers often find that clothing or shoes do not fit as expected, necessitating a return. Surveys indicate that up to 70% of returns are due to size or fit issues

Damaged or Defective Products

Items that arrive damaged or defective are another common reason for returns. This can occur during shipping or due to poor quality control by the seller. Ensuring robust packaging and quality checks can help mitigate this issue.

Changed Mind or Impulse Purchases

Customers may change their minds after making a purchase, often influenced by impulse buying behaviors typical of online shopping. This can be due to various factors, including finding a better alternative or simply realizing they no longer need the item.

Incorrect Orders

Mistakes in order fulfillment, such as sending the wrong item or variation, lead to frustration and subsequent returns. Accurate inventory management and fulfillment processes are crucial in reducing these errors.

Delivery Issues

Problems related to shipping—such as delays or receiving items later than needed—can result in returns. If an item arrives too late for its intended purpose, customers may opt to return it.

Poor Customer Service

Negative experiences with customer service can also lead to increase eCommerce return rates . If customers face issues during the delivery process or encounter unhelpful support when trying to resolve problems, they may choose to return products as a result of their dissatisfaction.

Misleading Product Information

Customers rely heavily on accurate product descriptions and images when shopping online. If they receive an item that does not match what was advertised—whether due to vague descriptions or misleading visuals—they are likely to return it.

What is eCommerce returns process?

eCommerce return process concerns working with customers who want to return an item, and then collecting, organizing, and restocking the returned or exchanged items. 

A common online return process often involves 8 steps:

1. Customer Initiates Return: The customer identifies an issue and submits a return request through the retailer’s website or customer service, often using a Return Merchandise Authorization (RMA).
2. Review of Return Request: The retailer reviews the request to ensure it complies with their return policy, checking the purchase history and eligibility criteria.
3. Generate Return Label: If approved, the retailer provides a return shipping label for the customer to print, containing all necessary shipping information.
4. Customer Ships Product Back: The customer securely packages the item, attaches the return label, and ships it back to the retailer via the specified carrier.
5. Inspection of Returned Item: Upon receipt, the retailer inspects the returned product for condition and compliance with return policy before processing any actions.
6. Processing Refund or Exchange: If the item meets criteria, the retailer processes a refund to the original payment method or facilitates an exchange based on customer preference.
7. Documentation and Confirmation: The retailer updates inventory records and completes necessary documentation while issuing receipts or confirmations regarding the return status.
8. Customer Communication: Throughout the process, the retailer maintains communication with the customer, providing updates on return status and confirming refunds or exchanges.

The eCommerce return process often involves customer support, logistics, and inventory management, so it is quite complicated and requires a lot of labor force. Therefore, the eCommerce return process hidden cost is normally high, which explains why this is a nightmare for any retailer.    

Best practices to handle product returns

Though product returning has gradually become a norm in the eCommerce industry, there are some eCommerce returns best practices you can apply to handle this uncomfortable situation. These tactics are applied to reduce the number of returns you have to handle and keep down the costs and efforts you have to put in your product returns process.  

1. Turn returns into exchanges

The very first practice you could apply when online shoppers have already requested a return is to turn their returns into exchanges. The major difference between returns and exchanges is profitability. When a return happens, you will lose money on the shipping costs and any profit you made with that order needs to be refunded. Meanwhile, an exchange can protect your profit and keep your business’s cash flow positive. 

You can offer free shipping only if customers select the exchange option and charge a small shipping fee for the refund option to encourage exchanges.

You can also suggest alternative products for the returned items so that customers can easily select an exchange item. Perhaps they prefer a different size, color, material, or there are other styles that suit them better. 

One of the best ways you can apply to encourage exchange is to offer customers coupons and discounts exclusively for this exchange. The incentive gives customers more options to pick an alternative for the item they want to return.    

Encouraging exchanges over returns not only reduces your hidden return costs but can also greatly enhance customer lifetime value, as they decided to give you a second chance with the exchange order.  

2. Provide clear eCommerce return policy

In order to handling eCommerce returns from the start, you need to provide a great and clear return policy. A return policy should communicate clearly with your customers about your shipping, return and exchange requirements. While each business may come up with a different return policy due to product condition and logistics, here are some basics that you should cover:

• What items can be returned and/or exchanged
• What items are non-returnable, non-exchangeable
• The timeframe for return and exchange items (5, 10, or 30 days after purchase date)
• In which conditions items will be returned (with tags, original package, original condition, etc.)
• How can customers initiate an exchange or return?
• Who pays the return shipping cost?

Once you have crafted a great return policy,  you should display it in strategic places throughout your eCommerce site to make sure shoppers can read it before they decide to make a purchase at your store. Normally, a return policy will be quite long, so you can display a summary of the terms and conditions and link it to the full policy. Some main locations for displaying return policy are:

• Product page
• Checkout page
• FAQ page
• Website chat
• Order confirmation email

It’s also beneficial to include a return policy at the footer of your site so customers can refer to it whenever necessary. A clear and transparent policy will help you reduce a huge amount of time communicating with customers about return conditions and dealing with unqualified product returns. Besides, potential customers are more likely to buy from brands that offer a clear return policy that can win their trust.  

3. Craft accurate and detailed product descriptions

It’s essential that your product descriptions are easy to find, descriptive, and detailed, and your product images need to be as close to your product ỉn reality as possible. If your product description is not clear, or the product arrived is far different from your product images, then there’s a high chance that customers will return this order. Many businesses try to describe the best version of the product to sell as many items as possible, but actually, the hidden cost of product return costs a lot, and they will lose loyal customers if they feel like your product description is unclear about what your products truly are. 

In order to reduce returns to a minimum, you should try to include as much information about your product as possible. You can rely on product configurator, such as interactive 3D or augmented reality,  to help customers better visualize the product before making a purchase. Normally, your product page needs to include:

• Size guides
• Material information
• Product weight  
• Shipping & Return policy 

along with pictures of products in different dimensions and videos of products if possible. Once your product description is clear and detailed to help customers get a true sense of your item, your return rate can be reduced significantly.

=> Read more: How to Design Your eCommerce Website for Success: A Complete Guide

4. Automate returns process

As we have stated, the returns process or reverse logistics can be quite burdensome and time-consuming with a lot of tasks to fulfill. In fact, the labor costs for handling a return order is far exceeding that of fulfilling an order. The returns process can be easier to handle if you automate some part of the traditional manual process. A return process automation can help you advance the process and reduce the workforce involved in this task.

It’s not possible to automate the whole returns process, but there are some parts that can be automated or made easy:

• Let customers initiate the returns process through a return page. 
• Include an automated prepaid label generator for customers to print and label their return orders.
• Utilize an inventory management system (IMS) or order management system (OMS) to manage inventory, returns, and orders across multiple channels better.

=>> Check out: 10 Best Magento 2 Order Management Extensions 

• Work with third-party fulfillment during busy and holiday seasons, rather than rely on in-house logistics team only. 

5. Keep customers informed about return status

If customers insist on making a return, you need to make sure that they enjoy the easiest return process, as a complicated one can make them lose interest in your brand and you might lose them forever. Besides letting them be well aware of your return policy upfront, it’s also essential that you notify them about return status. You can keep them updated by sending an email or SMS about the return process once they have shipped it. 

Normally, the shipping carrier will include a tracking number that you can provide to customers so that they can track the shipping status by themselves. Once the returned order arrives, you should send customers an automated email and give them an estimated time on how long they can receive their refund.   

6. Make use of analytics and feedback

Asking for further information when customers decide to return the product does not sound important, but this actually can provide insights to help you improve your products and service and reduce the returns rate. Acknowledge why customers are returning items help you identify your issues and try to address them in the future. For example, online shoppers may provide feedback that the product size is not fit, so you know you should provide more detailed size guidelines on your product page. 

Besides, getting thorough analytics of products having high return rates could help you to make strategic business decisions, such as improving the products or eliminating them from your store entirely. Reducing retail returns is one step to maximize profits for your eCommerce business, so you should think about it carefully.       

Latest eCommerce returns statistics

1. eCommerce return rate statistics 

• In 2021, online purchase returns spaned in almost all major product categories, ranging from 8% to 88%. Clothing retailers experience eCommerce returns the most, as this is the sector that 88% of consumers had decided to return their order. ^[1]

• The payment method that most customers who return their online order use are credit cards (22.78%). ^[2]

• The National Returns Day 2021, which often occurs at the beginning of January, has morphed into National Returns Week due to the massively increasing number of returns. UPS anticipated that there was a record-setting total of 8.75 million return packages during the week of Jan 4, 2021, 23% increase compared to the 2019-2020 holiday season. ^[3]     
• CBRE projected that eCommerce returns in the US could total  $66.7 billion in the 2021 holiday season, which is a 45.6% increase rate compared to 2016. ^[4]
• Only 17% of retailers have applied AI technology to support their supply chain management and returns. ^[5]
• Half of the companies in North America and Europe already offered free returns and planned to continue doing so in 2021. ^[6]

2. Online consumer returns habit

• One of the decisive reasons encouraging people to shop online is the easy returning policy (33%). Other factors that can be mentioned are free delivery and discounts. ^[7]
• 80% of online customers believe a bad return experience can break their loyalty. ^[8]
• 57% of shoppers prefer an online shopping experience that provides simple and reliable returns. ^[9]   
• 30% of online customers think fast refunds will contribute to a pleasant returns experience. ^[10]

• 55% of respondents made online purchases knowing they were likely to return some of the items purchased. ^[11]
• 63% of customers expect the return window up to 30 days, while 23% expect the traditional minimum of 14 days. ^[12]   

• 3 out of 4 shoppers in the recent study by Cycleon believe that they could wait for refunds longer if this was done in an environmentally friendly manner. ^[13]
• 49% of online consumers will check the return policy before deciding to order something. ^[14]
• 76% of first-time customers who enjoy an easy return experience say they would shop with that retailer again. ^[15]
• 57% of gen Z consumers believed they will return some of their gifts in the 2021 holiday season. ^[16]
• Despite being offered free shipping, 44% of consumers still prefer to return in-store. ^[17]

3. eCommerce returns and Covid-19 

• Before Covid-19, around 84% of consumers said they rarely or occasionally returned online purchases. This situation has changed significantly since 2020, as around a quarter of consumers returned between 5% and 15% of what they bought online. ^[18]  

• The return rates in the US could increase to as high as 30% amid the Covid-19 outbreak. ^[19]
• There are some considerable gaps in the customer return journey pre and after Covid-19. While the average time for customers to register a return and drop off the item was around 7 days pre-Covid, this journey was extended to nearly 12 days after the pandemic happened. ^[20]

• During the Covid-19, the majority of consumers worldwide prefer non-contact ways to return their orders, such as drop-off (39%) and pick-up (31%). ^[21]

• 42% of consumers had a negative returns experience during the lockdown that they decided to never shop with that retailer again. ^[22]
• 23% of product returns happen due to inaccurate depictions of the product. ^[23]

FAQs

What is the difference between a refund and a return?

A return refers to the process of sending back a purchased item to the retailer, while a refund is the monetary compensation given to the customer after the return is processed. Essentially, a return is the action of returning an item, and a refund is the outcome of that action.

What is the average return rate for e commerce?

The average return rate for eCommerce was reported as 17.6% in 2023, meaning that nearly 18 out of every 100 products sold are returned. Some sources indicate that this rate can vary, with estimates ranging from 20% to 30% depending on factors like product category and customer satisfaction 

What is the return policy for e commerce websites?

Return policies for eCommerce websites vary widely but generally include conditions such as time limits for returns (often 30 to 90 days), requirements for items to be in original condition, and whether customers need to cover shipping costs for returns. Many retailers emphasize clear communication of their return policies to enhance customer trust and satisfaction.

What is the return rate for e commerce products?

The return rate for eCommerce products can vary by category. For instance, clothing often experiences higher return rates, averaging around 25% to 40%, while other categories like electronics may see lower rates around 8% to 10%. Overall, online purchases tend to have higher return rates compared to in-store purchases.

What is eCommerce returns management?

E-commerce returns management refers to the systematic handling of product returns by online retailers. It involves several key stages:

1. Initiation: Customers initiate returns for reasons like defects or dissatisfaction
2. Inspection: Returned items are inspected to ensure they meet return criteria
3. Refunds/Exchanges: Customers receive refunds or exchanges based on the retailer’s policy
4. Customer Communication: Keeping customers informed throughout the process enhances satisfaction.

How to reduce returns in e-commerce?

To reduce returns in e-commerce, businesses can implement several strategies:

• Detailed Product Descriptions: Provide accurate descriptions and high-quality images
• Dynamic Sizing Charts: Offer comprehensive sizing information to help customers choose correctly
• Augmented Reality (AR): Utilize AR technology to allow customers to visualize products in their own space
• Extended Return Periods: Offering longer return windows can reduce hasty decisions
• Customer Reviews: Encourage customer feedback and reviews to build trust and inform future buyers.

What is the best e-commerce returns Platform?

While specific platforms may vary based on business needs, popular options include:

• Returnly: Offers seamless returns and exchanges with instant credit.
• Happy Returns: Provides a network of drop-off locations for easy returns.
• Loop Returns: Focuses on optimizing the returns process and enhancing customer experience.
  These platforms help streamline returns management and improve customer satisfaction.

Returns can become your opportunity 

eCommerce returns is on the rise and it will keep going in this direction when the eCommerce industry is expanding faster than ever. You should prepare for all factors involved in logistics, return, and inventory management in order to handle retail returns and maintain product margin. Not all tactics mentioned above can be practical to your business, but the key thing to remember is that eCommerce returns is not inevitable, but manageable. If you can handle product returns at your store, it might become a golden opportunity to build your brand name and gain loyal customers.