“Hope is not a strategy.”
Nowhere is that truer than in retail returns. Hoping customers won’t send items back isn’t realistic when the NRF projects $890 billion in U.S. returns for 2024, i.e.- nearly 17% of all sales running in reverse. At this scale, returns aren’t just logistics. They’re a stress test.
The numbers cut both ways according to the 2024 report-
And it’s not just consumers setting the bar higher. According to the NRF survey report, about 68% of retailers admit they’re upgrading their returns systems in the next six months because they see returns as strategic, not optional.
The bottom line is clear: customer expectations have shifted into customer demands. And just between you and me, here’s a secret tip- it’s nearly impossible to change how shoppers behave. What we can do instead is build smarter systems around those expectations.
So, the real question becomes: how do we design returns that protect our business while meeting those demands?
That’s where the tension lies. Because while customers expect seamless returns, 93% of merchants call return fraud and abuse a serious problem.
Over half of Gen Z openly admit to “bracketing”, i.e.- ordering multiple sizes with the intention of sending some back.
One Amazon seller vented on Reddit about how this actually looks like:
“Our sandals sell for $25. It costs us $9 to ship, leaving about $7 profit. When a customer orders two sizes, that’s $50 revenue but $18 shipping. She returns one pair; we eat another $6 in return fees and refund $25. Profit? Zero.”
He continued,
“And even worse, when sometimes they return it damaged or missing the box, in some cases people buy size 7, 7.5 and 8 just so they try them all”
Multiply that scenario across thousands of orders, and you see why bracketing has become such a pressure point.
The good news? Some retailers aren’t just absorbing the hit; they’re getting smarter about it.
Take Moosejaw for example, an outdoor gear retailer. Fit-related issues were fueling high return rates, especially from shoppers' bracketing sizes. Instead of absorbing the cost, Moosejaw went upstream:
Nearly 15% of returns were caused by size bracketing. To address it, Moosejaw:
Result: 24% drop in size-related returns, 34% decline in serial bracketers, and 18% fewer sequential reorders.
Take a look at Brandon Blackwood, the New York–based accessories brand. Refunds once meant lost revenue, but by restructuring its return flow, the brand shifted outcomes:
Result: nearly 30% of return revenue retained and an average $3.03 upsell per return. What once drained margins now fuels growth.
A shopper sees a $12.95 return shipping fee at checkout. Do you risk higher cart abandonment, or provide box-free, label-free drop-offs with instant refunds/exchanges that reassure the buyer?
To avoid this, leading retailers have partnered with logistics providers to make returns effortless:
Result: Customers feel more confident at checkout when returns are simple and transparent, while retailers reduce cart abandonment and retain loyalty.
Instead of risking cart abandonment over a visible $12.95 shipping fee, merchants can offer carriers’ box-free, label-free drop-offs, boosting customer confidence while keeping operations efficient.
A parallel- e-bike retailers like Magnum, Hamilton Electric, Levy, and Go Power Bike were selling complex products with thin margins. They faced a dual problem: customers worried about durability, and retailers struggled to stand out.
Instead of raising prices, they introduced extended and accidental warranty plans. Here’s what they saw:
Result: what began as a cost concern became a profit lever. Warranties turned hesitant buyers into loyal enthusiasts and gave retailers a unique differentiator in a crowded market.
For electronics, appliances, and gadgets, a more effective approach is to route product failures through warranty coverage. This keeps refunds from inflating your return totals while maintaining customer confidence that issues will be resolved fairly.
So, let’s take a closer look at how leading retailers are managing returns today, and what practical steps you can take to improve your own process.
But first, what are the common challenges merchants are facing today when it comes to customer returns?
Returns carry signals. Track return reasons by SKU, wrong size, damage, defect, or “not as expected.”
What customers say and what they actually experience may not always align. But at scale, patterns converge, and those patterns are actionable.
Use returns data as feedback at scale. It won’t be perfect, but it will show you where to act to reduce preventable returns.
For example- a leading electronics retailer introduced a barcode-based SKU tracking system for returns. Every product that came back was scanned, and the reason for return, defect, wrong size, damage, or “not as expected”, was logged. This gave the team visibility into which products caused the most issues and why.
With that data, they fixed problem SKUs, improved product descriptions, and streamlined processing. The result: returns processing time was cut by 50% and overall returns reduced by 25%.
Returns become expensive when too many steps are manual. The goal: Map → automate → notify.
To understand better, let’s take a look at One Project
Result: Reduced manual workload, enabled faster automated exchanges and refunds, and improved customer satisfaction with real-time updates.
A return policy isn’t fine print; it’s part of the shopping decision. If it’s hidden or confusing, you invite disputes and unhappy customers.
Let’s take Haus as example,
Result: Transparent communication reduces confusion and sets realistic expectations.
Automation reduces manual work, speeds up refunds, and limits disputes.
Automation isn’t just theory; brands that invested in streamlining their returns have seen measurable wins.
QALO is a U.S.-based lifestyle brand best known for its silicone wedding rings.
Result: Exchange processing time dropped from 7–14 days to just 2–5 days, making the system automated, scalable, and customer-friendly, a major driver of loyalty.
Not every issue should end in a refund.
3 out of 5 shoppers now blame merchants for failed deliveries, even when it’s a courier issue. That perception directly impacts brand loyalty. Choosing a strong warranty and shipping protection provider ensures issues are resolved fast.
Example: Merchants using AI-powered product protection platforms like SureBright can automatically route claims to warranty or shipping insurance instead of refunds. Coverage is added at checkout, claims are processed in 24–48 hours, and customers get a seamless “we’ve got you” experience.
We make it simple: one click at checkout, AI-powered classification, and fast claims resolution that turns protection into profit. Say hello! To know more
Returns don’t have to feel like a chore.
For instance, Zara shows how a simple fee plus its store network can create scaled control.
Result: The policy nudges more customers toward in-store drop-offs, reducing shipping strain while preserving convenience and flexibility for shoppers. It strikes a balance between operational efficiency and a positive customer experience.
Peak season exposes every weak spot.
Improving returns starts with measuring the right signals.
Finally,
Returns are no longer just a post-purchase task. They’ve become a key part of how customers judge the entire shopping experience.
From sizing issues to shipping damage, every return opens a decision point: refund, exchange, or repair. The merchants doing this well are the ones building smarter systems, where data flows into product pages, automation reduces effort, and warranty coverage protects margins.
Returns will always happen. The question is, how do you respond?
Because returns aren’t where the sale ends. They’re where retention begins.
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