The surge in e-commerce and shifting consumer expectations have led to rising return rates, creating both obstacles and opportunities for retailers. Returns have increased by 2.5% from last year, with 17.6% of items returned to their original vendor (Loop, 2025). This rise puts pressure on retailers to streamline return policies, improve logistics, and combat fraud while maintaining a seamless customer experience.
1. Develop Transparent and Customer-Friendly Return Policies
Clear and fair return policies are essential for building trust and loyalty. While some retailers have introduced return fees to offset costs, this approach can deter customers. Research indicates that six out of ten British shoppers would stop purchasing from retailers that charge for returns (The Times, 2024). Additionally, with 96% of customers tracking their returns at least once, offering real-time return tracking is no longer a luxury—it’s an expectation (Loop, 2025). By providing clear policies and transparent tracking, retailers can enhance the customer experience and encourage repeat purchases.
2. Leverage Technology to Reduce Return Rates
Advanced technologies, including artificial intelligence (AI) and augmented reality (AR), can help minimise returns by enhancing the online shopping experience. AI-driven tools provide accurate sizing recommendations, reducing the likelihood of size-related returns (Prime AI, 2025). Augmented reality allows customers to visualise products in real-time, leading to more informed purchasing decisions (Netguru, 2025). As return rates continue to climb – with 1 in 5 online orders returned in 2024 – retailers need to embrace these technologies to curb unnecessary returns and improve profitability (TrackingMore, 2024).
3. Implement Sustainable Return Practices
The environmental impact of product returns is a growing concern among consumers. Returns contribute significantly to carbon emissions and waste, especially when returned items are discarded rather than resold (BBC Earth, 2025). Retailers can address this by adopting sustainable practices, such as refurbishing and reselling returned products. Companies like ACS in Scotland are leading the way by repairing and reselling returns, thereby reducing waste and appealing to eco-conscious consumers (The Guardian, 2024). Additionally, as return rates increase, sustainability efforts in returns become even more critical for long-term brand loyalty.
4. Enhance Reverse Logistics Efficiency
Efficient reverse logistics are vital for managing the flow of returned goods. Optimising this process can lead to cost savings and faster restocking of products. Automation technologies, such as robotic sorting and material handling systems, expedite the processing of returned items, reducing manual labour and associated errors (robotics247.com, 2023). However, challenges remain, such as the high initial investment costs for implementing robotic systems, potential integration issues with existing warehouse management software, and the need for ongoing maintenance.
5. Monitor and Mitigate Return Fraud
Return fraud poses a significant challenge, costing retailers billions annually. Fraudulent returns have surged to £81.7 billion globally, highlighting the urgent need for better prevention strategies (Loop, 2025). Common fraudulent practices include “wardrobing – which involves purchasing clothing, wearing it, and then returning it for a refund (360idtag.com, 2025). Bloomingdale introduced the ‘b-tag’ to deter this practice – once the bulky, visible 3-inch tag is removed it can’t be returned.
Additionally, retailers are leveraging data analytics to detect anomalies and patterns indicative of fraudulent behaviour, enabling them to identify and prevent return fraud more effectively (Deloitte, 2025).
Embracing sustainable practices, leveraging technology, maintaining transparent policies, optimising reverse logistics, and combating return fraud are essential steps in adapting to the evolving retail environment. If you’d like to read about Stamp Free’s own patented innovative returns solution AppFree – a solution crafted with modern returns priorities in mind – click here!
References
360 ID Tag (2025) Single-use return fraud anti-wardrobing tags. Available at: https://www.360idtag.com/blogs/news/single-use-return-fraud-anti-wardrobing-tags (Accessed: 20 March 2025).
BBC Earth (2025) Your brand-new returns end up in landfill. Available at: https://www.bbcearth.com/news/your-brand-new-returns-end-up-in-landfill (Accessed: 20 March 2025).
Deloitte (2025) Fraud detection analytics: Retail shrink. Available at: https://www2.deloitte.com/us/en/pages/advisory/articles/fraud-detection-analytics-retail-shrink.html (Accessed: 20 March 2025).
Loop (2025) The true cost of return fraud: £81.7 billion and rising. Accessed offline (Accessed: 14 March 2025).
Netguru (2025) Augmented reality in fashion retail: 10 examples of how brands use AR. Available at: https://www.netguru.com/blog/augmented-reality-fashion-retail-examples (Accessed: 20 March 2025).
Prime AI (2025) Clothing size and fit finder. Available at: https://www.prime-ai.com/en/clothing-size-and-fit-finder/#:~:text=The%20Clothing%20Size%20Finder%20by,enhancing%20the%20online%20shopping%20experience (Accessed: 20 March 2025).
Robotics247 (2023) Reverse logistics begins to benefit from automation. Available at: https://www.robotics247.com/article/reverse_logistics_begins_to_benefit_from_automation (Accessed: 20 March 2025).
The Guardian (2024) Many happy returns? Sustainable startups are turning a profit from your unwanted clothes. Available at: https://www.theguardian.com/fashion/2024/dec/29/many-happy-returns-sustainable-startups-are-turning-a-profit-from-your-unwanted-clothes (Accessed: 14 March 2025).
The Times (2024) Shoppers warn retailers: we’ll buy elsewhere if you end free returns. Available at: https://www.thetimes.co.uk/article/shoppers-warn-retailers-well-buy-elsewhere-if-you-end-free-returns-dxnbvcgb3 (Accessed: 14 March 2025).
Vogue Business (2024) Haul culture is fuelling returns. What can brands do? Available at: https://www.voguebusiness.com/story/consumers/haul-culture-is-fuelling-returns-what-can-brands-do (Accessed: 14 March 2025).
