Over the last decade, “Free Returns” became the new “Free Shipping,” going from differentiator (for pioneers like Zappos) to table stakes (for everyone else). But the tide is turning.
According to logistics provider goTRG, 49% of US retailers now think of Returns as a severe problem, especially during the holiday season.
In just the last five years, the Returns rate doubled from 8% to 16% and total Returns tripled from $309 billion in 2019 to an expected $900 billion in 2024 (according to Happy Returns and NRF).
The phenomenon of “Free Returns” drove whole new types of shopping behavior, like “bracketing”, where shoppers buy multiple sizes, fits, and colors to try on at home and then return most of it (encouraged by brands like Zappos).
Facing the massive and unsustainable burden of reverse logistics, many retailers are starting to pull back.
Fast-fashion brands like Zara and H&M now charge return fees. Some are cutting return windows way back. Others are making returns less convenient with new policies like BORIS (Buy Online Return In Store).
Many brands are simply making the act of Returns a pain. I recently bought something from Wedgwood and they shipped the wrong product by mistake. Expecting the usual Free and Easy Returns process (particularly for a premium brand like Wedgwood), I was surprised the brand had replaced their live customer service with a web form that took nearly a week to get any sort of response at all, and then required follow-ups to actually get a free return shipping label.
This mismatch between consumer expectations and retailers pulling back is creating friction. Brands will have to manage how they communicate their return policies and make sure the pendulum doesn’t swing so far in the other direction they affect how people perceive the brand. How brands treat shoppers after a purchase is every bit a part of the brand as the actual product.
Blue Yonder found in a recent survey that retailers with tighter return policies are deterring shoppers from purchases (76% of Gen Z and 69% overall claim to be deterred).
As David Sobie, CEO of Happy Returns, put it:
“Return policies are no longer just a post-purchase consideration — they’re shaping how younger generations shop from the start.”
Here are a few related cartoons I’ve drawn over the years:
