Let me introduce Zainab Hussain, a seasoned e-commerce strategist with a deep understanding of customer engagement and operations management. With years of experience helping retailers navigate the complexities of online shopping trends, Zainab offers invaluable insights into the evolving world of returns, consumer behavior, and fulfillment strategies. In our conversation, we dive into the projected decline in return rates for 2025, the financial implications for retailers, and how they can transform returns into opportunities for loyalty. We also explore the shift away from overly generous return policies, the impact of practices like bracketing, and the role of technology in streamlining the process.
How do you see the predicted drop in return rates for 2025 influencing the retail landscape, especially since the total value of returns is still expected to be nearly $850 billion?
I think the predicted drop in return rates to 15.8% in 2025, down from 16.9% in 2024, reflects a growing awareness among both retailers and consumers about the costs and inefficiencies of returns. It’s a positive shift, showing that strategies like better product descriptions, enhanced imagery, and improved sizing tools are starting to pay off. However, the sheer value of returns—nearly $850 billion—reminds us that returns are still a massive challenge for retailers’ profitability. This high dollar amount means retailers can’t just celebrate the lower rate; they need to keep focusing on reducing return frequency while managing the costs of processing such a huge volume. It’s a balancing act between maintaining customer satisfaction and protecting their bottom line, often requiring smarter logistics and transparent policies to avoid eroding margins.
What factors do you believe are driving this decrease in return rates, and do they point to a broader change in how consumers shop or how retailers operate?
Several factors are contributing to this decrease. On the consumer side, there’s a bit more caution in purchasing due to economic uncertainty and inflation, which might mean fewer impulse buys and thus fewer returns. On the retailer side, there’s a clear push toward better upfront information—think detailed product pages, virtual try-ons, and AI-driven fit tools—that helps customers make more informed decisions. I’d say it’s more about retailer operations evolving than a massive shift in consumer behavior. Retailers are tightening policies and investing in tech to prevent returns, rather than just reacting to them. That said, consumer expectations for convenience and transparency are also shaping these changes, so it’s a bit of a two-way street.
Returns are often seen as a pain point, but they can also be a chance to build brand loyalty. How can retailers turn a return into a positive customer experience?
Absolutely, returns don’t have to be a negative touchpoint. Retailers can turn them into loyalty-building moments by making the process seamless and empathetic. For instance, offering easy-to-use digital return portals, providing clear instructions, and ensuring quick refunds or exchanges can leave a customer feeling valued rather than frustrated. Some retailers go further by personalizing the experience—maybe including a handwritten thank-you note or a discount on a future purchase with the return confirmation. It’s about showing the customer that their satisfaction matters, even when a product doesn’t work out. When done right, a smooth return can make a customer more likely to shop with that retailer again.
With many consumers expecting free returns, how can retailers manage those expectations while keeping costs under control?
It’s tricky because about a third of consumers see free returns as a non-negotiable, but the costs for retailers are significant. One approach is to offer free returns selectively—perhaps as a perk for loyalty program members or for higher-value purchases—while charging a small fee for others. Another strategy is to incentivize alternatives, like store credit instead of a refund, which can keep money within the ecosystem. Retailers can also focus on reducing return frequency in the first place with better product info and fit guidance, so the issue of cost becomes less frequent. Transparency is key; if customers understand why a fee exists, like covering shipping or restocking, they’re often more accepting of it.
As return policies move away from being overly generous, why do you think this change is happening now, and what’s behind the timing?
This shift away from ‘free-for-all’ return policies is largely driven by the unsustainable costs retailers have been facing. For years, generous policies were a competitive edge to build trust in online shopping, but with rising logistics costs, supply chain disruptions, and economic pressures, retailers are realizing they can’t keep absorbing those expenses. The timing also aligns with consumers becoming more accustomed to online shopping—they’re less likely to need endless return windows to feel secure. Plus, advancements in technology allow retailers to predict and prevent returns better, so they’re leaning on data to justify tighter policies while still aiming to maintain customer trust.
How can retailers communicate changes like return fees or shorter return windows without risking customer backlash?
Communication is everything here. Retailers need to be upfront and clear about any changes well before a customer makes a purchase. This means updating policy pages, sending email notifications, and even displaying return terms prominently at checkout. Framing these changes as a way to keep prices fair or to invest in better shopping tools can help customers see the bigger picture. It’s also helpful to offer value in exchange—like faster processing or eco-friendly return options—to soften the blow. The goal is to make customers feel informed and respected, not blindsided by a fee or deadline they didn’t expect.
Bracketing, where shoppers order multiple items intending to return some, is a big issue, especially in apparel. What strategies can retailers use to minimize this behavior?
Bracketing is a huge headache for apparel retailers because it drives up return volumes and costs. One effective strategy is to improve the pre-purchase experience with better sizing tools and fit guides—think detailed measurements, customer reviews on fit, or even virtual fitting rooms. Retailers can also experiment with charging a small upfront fee for multiple sizes that gets refunded if the customer keeps an item, which discourages over-ordering. Another angle is to educate customers on the environmental and cost impact of bracketing, appealing to their values. It’s about making the right choice easier and the wasteful one less appealing.
What specific technologies or tools do you think are most effective in helping customers choose the right size or style to avoid unnecessary returns?
There are some fantastic tools out there that are game-changers for reducing returns. AI-powered sizing algorithms that analyze a customer’s measurements and past purchases to recommend the best fit are incredibly effective. Augmented reality apps that let customers ‘try on’ clothes virtually are also gaining traction, especially for younger shoppers. High-quality imagery and 360-degree product views help set accurate expectations, while detailed customer reviews about fit and quality can guide decisions. The key is integrating these tools seamlessly into the shopping experience so they feel helpful, not cumbersome.
With economic uncertainty and inflation influencing consumer behavior, how do you think these factors are reshaping expectations around returns?
Economic uncertainty and inflation are making consumers more price-sensitive, which can cut both ways for returns. On one hand, they might be more cautious with purchases, leading to fewer returns. On the other, they might expect more lenient return policies as a safety net since they’re taking a bigger financial risk with each buy. Retailers are caught in the middle—needing to tighten policies for cost reasons while facing customers who want flexibility. I think we’ll see more compromise solutions, like extended return windows during holidays or tiered policies based on purchase value, to address these heightened expectations without breaking the bank.
Looking ahead, what is your forecast for how return management will evolve in the coming years, especially with the rise of new shopping technologies?
I believe return management will become increasingly tech-driven and proactive over the next few years. We’re already seeing the impact of AI and predictive analytics in identifying potential returns before they happen, and I expect that to grow, with more personalized shopping experiences reducing mismatches. Conversational commerce tools, like chatbots powered by advanced AI, will guide customers to better purchases in real-time, cutting down on errors. On the logistics side, smarter platforms for consolidating shipments and optimizing return routes will lower costs. Ultimately, I foresee a future where returns are less of a burden and more of a strategic touchpoint—less about damage control and more about deepening customer relationships through seamless, efficient processes.
