Retail Returns Get Risky🔁

Happy Monday! Retailers are losing billions not to sales—but to returns. Shoppers are sending goods back faster than ever, and Gen Z is leading the charge with “try, wear, return” habits that blur the line between honest and fraud. In the UK, refund speed now defines loyalty as brands test whether customers will pay for convenience or patience.

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🔁 Retail Returns Get Risky
💸 UK Returns Reality Check
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Retail returns are holding steady but not slowing down. According to the NRF 2025 Retail Returns Landscape report, US shoppers are sending back goods worth nearly $850B annually. The study, based on surveys of more than 2K consumers and 350 merchants, shows that while overall return rates stabilize, online habits—especially among Gen Z—are driving new costs and behaviors retailers can’t ignore.

US retail returns are expected to reach $849.9B in 2025, equal to 15.8% of total sales. Online orders are even higher, with nearly one in five items (19.3%) expected to be sent back. The rate has tripled since 2019, fueled by rising digital purchases and consumer expectations for free, instant returns. Retailers now face the challenge of maintaining convenience without eroding profitability.

Gen Z leads all generations in online returns, averaging 7.7 per year versus 7.1 for Millennials and just 4.8 for Boomers. They spend the most per order ($208) yet are more prone to “bracketing”—buying multiple sizes and returning most. Their experimental shopping and higher confidence in digital-first brands make them lucrative but costly customers, demanding seamless returns and instant refunds.

Honesty in returns is fading. Forty-five percent of shoppers admit bending the truth when sending items back, but among Gen Z that number jumps to 66%. Fraud-like behavior is spreading: 39% of Gen Zs admit to sending “decoy” returns and half to wardrobing—buying, wearing once, and returning. More than half (53%) admit to bracketing, creating a culture of normalized returns abuse.

To fight back, 42% of retailers now add more product reviews, 41% boost sizing info, and 38% highlight low-return items. AI-based fit tools, checkout reminders, and exchange incentives each feature in about 36% of retail strategies. Some have gone further, charging for return shipping (33%) to limit abuse. The strategy is clear: smarter product data and better experiences to prevent returns before they happen.

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British shoppers are rewriting the returns rulebook. According to the 2025 ZigZag and Retail Economics benchmark, fees, speed, and transparency now define loyalty. The study, based on a nationwide retailer and consumer survey, reveals a market split between fast, low-cost returns and luxury experiences that still cushion customers with free options.

Value retailers charge for returns more than any other segment—82% compared to just 11% for luxury. Despite the fees, they process refunds fastest at 5.1 days on average. Luxury brands keep returns free but slower, taking 7.3 days. Across the board, average return costs hover around £3.30, signaling a shift from free convenience to paid efficiency.

Young fashion and value chains offer the most return options yet charge most frequently. With 3 options on average, they combine flexibility with fees to control logistics costs. Luxury and premium brands sit opposite—fewer choices but higher costs per return, preserving exclusivity. The correlation is clear: more options often mean more charges.

Millennials are the first to abandon purchases over restrictive return terms. Over 60% of 25–34-year-olds say they’ve ditched an apparel buy due to poor return policies. The sensitivity drops sharply with age, highlighting how flexible returns are now table stakes for younger shoppers. For Gen Z and millennials, complexity equals cart abandonment.

Speed defines satisfaction. Refunds processed within three days delight customers; by day six, frustration dominates. After nine days, most shoppers say they won’t return to the same brand. In a market where trust erodes by the day, faster refunds aren’t a perk—they’re the cost of survival.

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