COLUMBUS, Ohio – New research has found that almost two-thirds (63%) of U.S. shoppers have either stopped shopping with a retailer or abandoned a purchase because of its return policy.
The findings, conducted independently among 1,000 U.S. consumers and 200 U.S. retail decision-makers by ecommerce operations platform, Loop, highlight the growing influence of returns on the U.S. online shopping experience, as retailers look to balance increasingly high consumer expectations with the operational and financial pressures associated with returns.
Returns economy is fueling a growing fraud challenge
The research suggests that questionable returns behavior is becoming increasingly commonplace among U.S. shoppers. More than four in ten consumers (44%) admit they have previously provided a different reason for making a return rather than the exact truth, while almost one in three (31%) admit to substituting the original item with something else when making a return.
Retailers are feeling the impact. Almost two-thirds (62%) of U.S. retailers say false claims relating to damaged or missing items are among the most common forms of returns fraud they encounter, while more than half (54%) regularly deal with customers returning different or damaged items. Wardrobing – where shoppers wear an item before returning it – is also encountered by 38% of US retailers.
Despite the scale of the problem, US retailers appear to be slow to invest in fraud technology, with only 43% of respondents using fraud detection tools and less than one in five (19%) using AI or machine learning-driven fraud detection. In fact, half (50%) of US retailers still rely on manual reviews to help identify suspicious returns.
The study also highlights how returns have become embedded in modern shopping behavior. Three in ten US consumers (30%) say they have deliberately ordered multiple sizes or styles with the intention of returning some, while a third (33%) have returned an item that failed to meet expectations after briefly wearing it.
These findings suggest that for many Americans, returning items is now simply part of the online shopping journey rather than an exception.
Retailers face a growing loyalty dilemma
While consumer expectations continue to rise, retailers are increasingly aware that the post-purchase experience can directly influence commercial performance.
Almost two-thirds (65%) of U.S. retailers agree that the returns experience has a significant impact on customer loyalty. At the same time, 56% are concerned that tightening returns policies could result in customers leaving their brand altogether, while 57% worry about potential backlash on social media or public forums if they make returns more restrictive.
There is also evidence that retailers may still underestimate the commercial impact of returns. While 63% of consumers have already stopped shopping with a brand or abandoned a purchase because of its returns policy, only 13% of U.S. retailers identify customer churn as the biggest financial impact of returns. Instead, lost revenue remains the most commonly cited concern, identified by 36% of retailers.
Returns are increasingly deciding where Americans shop
Almost six in ten U.S. consumers (58%) say they always or often check a retailer's returns policy before making an online purchase, underlining how closely the post-purchase experience is now linked to the initial buying decision.
Return charges also have a significant influence on purchasing behavior, with 92% of U.S. consumers saying fees affect how they shop online in some way. Nearly half (46%) say return fees make them more careful about what they buy.
However, consumers are not universally opposed to paying for returns. More than a third (36%) of U.S. shoppers say they would be willing to pay a return fee in exchange for a more premium returns experience – significantly higher than the 24% recorded among U.K. consumers in the same global study.
Hannah Bravo, CEO of Loop, commented: "Shoppers are judging brands on what happens after the sale, and that judgment turns into action. Looking at the data, shoppers are saying that a bad returns policy has made them walk away from a brand, whereas many retailers still aren't recognizing or acknowledging this risk. This gap represents a significant opportunity for the brands that do see returns as a driver of growth, rather than a cost center."
She added: "The ultimate outcome of a return experience is a major driver of customer retention, good or bad. A staggering 87% of shoppers report a willingness to take an exchange under the right circumstances, and the value of that opportunity is eye-popping: over $2 billion globally to the brands Loop serves today."
The findings form part of Loop's latest research report, The Returns Revenue Gap, examining changing consumer and retailer attitudes towards the post-purchase experience and the growing role that returns, exchanges, tracking, refunds and customer communication play in shaping long-term retail loyalty.
Key findings
- 63% of U.S. consumers have stopped shopping with a brand or abandoned a purchase because of its returns policy.
- 92% say return fees influence their online shopping behavior in some way.
- 65% of U.S. retailers say the returns experience has a significant impact on customer loyalty.
- 36% of consumers are willing to pay a return fee for a more premium experience.
- 62% of retailers encounter false claims relating to items not being received or arriving damaged.
- 79% of brands say fraud and abuse is a problem.
- 54% of retailers encounter customers returning different or damaged items.
- 44% of consumers admit they have sometimes or often given a different reason for a return rather than the exact truth.
- 30% have ordered multiple sizes or styles intending to return some.
- 31% have substituted the original item with something else when making a return.
- 50% of retailers use manual reviews to mitigate returns fraud.
- 19% use AI or machine learning-driven fraud detection tools.
- 56% of retailers worry that tightening their returns policy could cause customers to leave the brand.
- 57% are concerned about social media or public backlash if they tighten returns policies.
