Survey at a Glance:
The Why Do Shoppers Return Purchases, and How Can Brands and Retailers Reduce Returns report is based on a survey of 9,286 US adults fielded in November 2022. Here’s a snapshot of our key findings.
- Eight in ten (81%) of shoppers say that free shipping is an important consideration when making a purchase online.
- 87% of consumers would be at least a little likely to stop shopping with a brand or retailer that stopped offering free returns; 39% would be very likely to do so.
- 80% of consumers would be at least a little likely to stop shopping with a brand or retailer if they reduced the time window in which they’d accept free returns; 17% would be very likely to do so.
- Nearly nine in 10 (88%) shoppers return products purchased online at least sometimes.
- 53% of consumers return products purchased online as often as they return those purchased in store. Only 18% return online merchandise more often.
- Shoppers return products across all categories, but clothing (82%), shoes (51%) and electronics (43%) top the list.
- Just 17% of consumers think that the majority of returned products are discarded.
- Three-quarters of shoppers are at least somewhat concerned with the environmental impact of free returns; 14% are very concerned.
- 92% of consumers are at least a little inclined to shop with a brand or retailer if they have more sustainable return and shipping practices. Four in 10 (40%) are very inclined to shop with such a brand.
- Damages and defects are the top reason for returns; 81% of consumers have returned products purchased online because they were damaged or defective.
- Poor fit is a reason for returns among 75% of consumers.
- The number three reason for returns is that the item didn’t match its description; 56% of consumers cited this as a reason.
- 72% of consumers are less likely to return a product they purchased online if they were able to read questions from other consumers and submit their own via the Q&A section on the product page prior to purchase.
- Being able to see photos and videos from other consumers before making a purchase reduces the return likelihood for 69% of shoppers.
- 66% of shoppers say the ability to read ratings and reviews prior to purchase decreases their likelihood to make a return.
Contents
Introduction
Product returns are a fact of life for all brands and retailers – even the best out there. Returns (especially free ones) are a logistical nightmare – and a costly one at that. According to an NRF survey, the average retailer incurs $166 million in returns for every $1 billion in sales. And the costs of shipping both ways, labor, and storage add up.
To add insult to injury, Gartner research found that less than half (48%) of returned merchandise can be resold at full price. In fact, returned merchandise ends up in the landfill more often than we’d like to think – causing a big hit to both your bottom line and the environment.
It’s no wonder why a growing number of brands and retailers are saying “enough is enough” and taking action to reduce returns. Some – including industry leaders like the Gap and J.Crew – have reduced the window in which they’ll accept free returns. And according to an article for RetailWire, others, including Abercrombie & Fitch, REI, and Anthropologie, are charging a fee for mailed returns. Some are even doing both.
Tightening your returns policies may help you reduce the amount of merchandise that’s sent back. But if your policies are too rigid, it’ll likely cost you your customers. That’s because modern consumers have come to expect flexible (and free) returns across product categories.
Brands and retailers must strike the right balance of meeting shoppers’ expectations for flexible returns – while still preserving profits. But how?
The first step is to take a closer look at the returns habits of modern consumers – and the reasons behind their behaviors. By understanding the key motives behind returns, brands and retailers can more effectively address them.
We surveyed more than 9,000 U.S. consumers to understand how return policies impact purchase decisions, why shoppers return merchandise, and strategies that help brands and retailers to combat many of these reasons.
Methodology
This report is based on an analysis of a survey completed by 9,286 adult consumers in the U.S. The survey was fielded in November of 2022.
Here’s a closer look at who we surveyed:
Generations
(1997-present)
(1981-1996)
(1965-1980)
(1946-1964)
Household Income
Average Overall Monthly Online Spend
Top Considerations When Shopping Online
We know from previous research that ratings and reviews have become the most important factor impacting purchase decisions, followed by price.
But beyond those basics, there are many other things consumers consider when making purchase decisions. Free shipping tops the list, with nearly all (99%) of consumers indicating it’s something they consider when purchasing online. At 81%, free returns comes in at #2.
Free returns are a top consideration among all generations and income levels. However, in line with last year’s findings, the higher a consumer’s household income, the more likely they are to value free returns.
How Changes to Return Policies Impact Purchase Behavior
The majority of consumers say that free returns is something they look out for when making purchase decisions. Yet, a growing portion of brands and retailers are looking to scale back on free returns to reduce overheads. Some are eliminating free returns altogether. Others are shortening the window for making returns.
How do changes to returns policies impact shoppers’ behaviors?
Axing Free Shipping will Send Customers Packing
87% of consumers say they’d be at least a little likely to stop shopping with a brand if they stopped offering free returns; 39% are very likely to ditch the brand.
Eliminating free shipping has a similar impact on shoppers of all generations. However, Gen Z has the smallest portion of shoppers indicating they’d be very likely to stop shopping with a brand if they stopped offering free returns.
In addition, as household income increases, so too does the portion of shoppers indicating they’re very likely to abandon a brand if they stop offering free shipping.
Shortened Return Windows will Deter Shoppers
Eight in ten consumers would be at least a little likely to stop shopping with a brand or retailer if they reduced the time window in which they would accept free returns; 17% would be very likely to do so.
The impact of a reduced free return window is very similar across generations. However, Gen Z shoppers are slightly more prone to indicate they’re very likely to ditch a brand after they shorten the window for free returns.
Shortening the free returns window impacts consumers across all income brackets. However, the lower a consumers’ income, the more probable it is that a shortened return window won’t impact whether they buy from the brand or retailer in the future.
Concern with the Environmental Impact of Free Returns
For many consumers, free returns have become an expectation. While free returns are convenient for consumers, there’s no denying their negative impact on the environment.
Consumers Underestimate the Portion of Returned Products That are Trashed
A returned product might face any number of fates – depending on factors including product type, condition, and reason for return. And unfortunately, a large portion ends up in the trash heap.
But what do consumers think happens to the merchandise they’ve returned?
The largest portion of consumers (44%) believe that the majority of returned merchandise is resold. A mere 17% think that most returned merchandise ends up being discarded. Yet, according to an article for NPR, about a quarter of returns are trashed.
Gen Z shoppers have a more realistic view of the portion of returned merchandise that is thrown away. Also of note, the older the consumer, the more likely they are to be unsure of what happens to returned merchandise.
Consumers are Concerned with the Environmental Impact of Free Returns
According to the same NPR article mentioned earlier, returns in the U.S. create nearly six billion pounds of landfill waste each year. And that’s not to mention the 15M tons of CO2 emitted in the returns process.
But does the environmental impact of free returns concern shoppers? Three-quarters say they’re at least a little concerned; 14% are very concerned.
Of note, younger consumers are more likely to indicate they’re very concerned about the environmental impact of free returns. 19% of Gen Z consumers are very concerned, compared to 12% of Boomers. On the other hand, older consumers are more likely to say they’re not concerned at all. Nearly a third (31%) of Boomers are not at all concerned with the environmental impact caused by free returns – compared to 20% of Gen Z’ers.
Offering more sustainable return and shipping practices can be a competitive advantage among the many consumers concerned about the environment. Nearly all (93%) of consumers indicate they’re at least a little inclined to shop with a brand or retailer that offers more sustainable return and shipping practices. 40% are very inclined to do so.
Of note, 44% of Gen Z’ers say they’d be very inclined to shop with a brand or retailer with more sustainable return and shipping practices, compared to 35% of Boomers. On the other hand, 11% of Boomers indicate they’re not at all inclined – compared to 5% of Gen Z’ers.
The Return Habits of Modern Consumers
Now that we have a clear understanding of the importance consumers place on free shipping – and how changes to free shipping policies impact their behavior – let’s take a closer look at the return habits of consumers.
Returns are Extremely Common
Again this year, 88% of consumers say they return products purchased online at least sometimes. That leaves a mere 12% than never return merchandise purchased online.
Interestingly, Gen Z are the group most likely to say they never return products purchased online.
Those consumers with the lowest income ($0-$25,000) are the income group most likely to say they never return products ordered online. That’s likely because they’re not making many discretionary purchases online to begin with.
On the other hand, those with high incomes ($250,000+) are the income group most likely to say they always or regularly return merchandise they purchase online. Again, this is because high income individuals spend more online – and thus have more opportunities to return merchandise.
Consumers Return Online and In-Store Purchased Merchandise at Similar Rates
It’s easy to assume that merchandise purchased online is returned more frequently than merchandise purchased in-store. This is the case for some consumers – but not all.
Over half (53%) of shoppers say they return products purchased online as often as they return those purchased in store. Over a quarter (29%) say they return products purchased online less often than items they purchased in-store.
There are some interesting outliers. For example, nearly half (45%) of Gen Z’ers say they return online purchases less frequently than items purchased in-store. On the other hand, Boomers are the group that’s least likely to say they return online purchases more than in-store ones.
Also of note, as income increases, so too does the portion of consumers who indicate they return online purchases more frequently than in-store purchases. That makes sense. High income individuals are likely buying more – and thus have more to return.
Consumers Return Many Types of Products
Returns are common across many product types. However, there are certain items that are especially susceptible. Again this year, clothing tops the list – followed by shoes and electronics.
Why Consumers Return Online Purchases
Returns are all too common. But what are the top reasons consumers return merchandise purchased online?
This year, damaged or defective items top the list of reasons for returned merchandise. Poor fit (75%) and the item not matching its description (56%) round out the top three.
The good news? Collecting and displaying user-generated content can help you dramatically decrease returns due to poor fit and a product not meeting expectations. We’ll explore this in detail in the next section of this report.
How the Presence of UGC Impacts Return Likelihood
It’s impossible to completely eliminate returns. However, there is something brands and retailers can do to significantly cut down on them: provide shoppers with access to plenty of user-generated content.
This year, questions and answers are the type of UGC with the biggest impact on return rates. Nearly three-quarters (72%) of consumers indicate they’d be less likely to return products if they were able to read Q&A from other consumers – or submit their own questions to be answered by the brand or retailer.
In addition, 69% would be less likely to return products purchased online if they had the opportunity to access user-generated photos and videos of the product in action. And 66% say the ability to read ratings and reviews would decrease their likelihood of returning merchandise.
As was the case last year, younger consumers are especially impacted by the presence of user-generated content.
82% of Gen Z shoppers and 76% of Millenials say they’d be less likely to return products if they were able to first browse questions asked by other shoppers or submit their own via Q&A functionality on the product page. In comparison, 66% of Gen X’ers and 61% of Boomers said this was the case.
The youngest shoppers are also much more prone to indicate that consuming user-generated visual content prior to purchase decreases their likelihood of returning a product.
When it comes to ratings and reviews, three quarters of Gen Z’ers and 71% of Millennials indicate they’d be less likely to return products if they were able to view this feedback prior to purchase. 58% of Gen X’ers and 52% of Boomers say this is the case.
5 Key Takeaways for Keeping Product Returns at Bay
Product returns are an inevitable aggravation for brands and retailers – and a costly one. Yet, eliminating returns will cost you customers. Brands and retailers must find the right balance between meeting shoppers’ expectations – and preserving profits.
The following are five key takeaways from our latest survey
These days, consumers expect flexible – and ideally free – returns. Eight in ten (81%) say that free shipping is something they consider when making a purchase online.
Offering a free, flexible return policy can be a big competitive advantage.
On the other hand, eliminating such policies will cost you customers. Over a third (39%) of consumers say that if a brand or retailer stopped offering free returns, they’d be very likely to stop buying from the business.
Most consumers want the option to return products purchased online for free. And many exercise this option. A staggering 88% return items purchased online at least sometimes.
Many brands and retailers worry that the influx in online shopping will lead to greater return rates. However, only 18% of consumers return products purchased online more often than those purchased in-store. About half (53%) return products at the same rate – whether they were purchased online or in-store. The remaining 29% return online purchases less often than in-store purchases.
Sure, free returns are convenient to customers. But between increased landfill waste and carbon emissions, returns aren’t so great for the environment.
Consumers are taking note. Three-quarters indicate they’re at least somewhat concerned with the environmental impact of free returns – and 14% are very concerned.
Adopting more sustainable shipping and returns practices is better for the earth – and it gives you a competitive advantage. Almost all consumers say they’re at least a little inclined to shop with a company that has environmentally friendly return and shipping practices, and 40% are very inclined to do so.
Returns are a fact of life for brands and retailers. Understanding the key reasons for returns is critical to reducing their frequency.
Consumers return products purchased online for any number of reasons. But there are a few that stand out. 81% of consumers have returned merchandise purchased online because it was damaged or defective. Here, there may be an opportunity to improve quality control and shipping practices.
The other top reasons for returns are a poor fit (75%) and the item not matching its description. When shopping online, it can be harder to access fit and other product qualities. The onus is on brands and retailers to provide tools that give shoppers a clear, accurate picture of what to expect from a product – and help them to choose the right size.
User-generated content, including Q&A, ratings and reviews, and visual content, can be a powerful way to combat some of the top reasons for returns, including poor fit and inaccurate expectations.
72% of shoppers say they’d be less likely to return products purchased online if they could read questions from past customers and submit their own via Q&A. 69% indicate that the presence of user-generated photos and videos would decrease their likelihood of purchase, and 66% say that being able to read ratings and reviews prior to purchase would make them less likely to return the product in question.
