Managing returns is one of the biggest challenges for online retailers, directly affecting profitability and customer loyalty. Retailers expect 15.8% of all sales to be returned in 2025, totalling $849.9 billion, and the rate is higher online, at 19.3% of e-commerce sales, according to the National Retail Federation (NRF) 2025 Retail Returns Landscape report. Such staggering numbers highlight why business leaders must treat returns as a priority, not an afterthought. Reducing e-commerce return rates is about protecting margins while building resilient, future-ready operational models. This is why decision-makers across finance, procurement, and operations are increasingly focusing on strategies that lower return volumes, strengthen customer relationships, and streamline supply chains.
What is a good e-commerce return rate?
The e-commerce return rate is the share of items sold online that customers send back. It is calculated as: return rate (%) = (items returned ÷ items sold) × 100, measured over the same period. For example, 190 returns from 1,000 items sold gives a return rate of 19%.
Benchmarks vary widely by category. Apparel and footwear sit at the top because fit and appearance are hard to judge on screen, while categories such as books and household staples see far fewer returns. As a reference point, NRF puts the average online return rate at 19.3% for 2025, so retailers often compare their own rate against this figure and against their category peers.
How to reduce returns in e-commerce: the short answer
The most effective way to reduce returns in e-commerce is to remove the reasons customers return items in the first place: unclear product information, poor fit, damage and slow delivery. In short:
- Write accurate, detailed product descriptions
- Show products with high-quality images and video
- Offer reliable sizing guides and fit tools
- Use verified customer reviews
- Encourage exchanges over refunds
- Improve packaging and delivery
- Personalise recommendations with AI
- Strengthen customer support before and after purchase
- Analyse return data to find patterns
- Set clear, fair return policies
Common reasons for e - commerce returns
Understanding the causes behind returns provides the foundation to prevent e - commerce returns. Each reason points to an opportunity for businesses to refine processes and enhance customer experience.
- Damaged or defective items: Products that arrive broken or faulty reduce trust, increase costs, and weaken brand credibility.
- Mismatch with descriptions: Items that fail to match online details make customers feel misled and more likely to return them.
- Wrong product delivery: Incorrect fulfilment creates frustration, leads to avoidable returns, and wastes logistics resources.
- Incorrect size or fit: Apparel and lifestyle products often face high return rates when customers cannot select the right size.
- Late deliveries: Products that arrive after the promised date often lose relevance, especially for time-sensitive occasions.
- Perceived lack of value: Items that seem overpriced for their quality drive dissatisfaction and higher return volumes.
- Customer dissatisfaction: Even with accurate descriptions and timely delivery, some customers simply do not like the product.
High return volumes affect the bottom line, disrupt inventory planning, and create ripple effects across logistics and customer service. Ultimately, a poor e-commerce returns rate damages reputation and customer confidence – outcomes every business must avoid.
Top 10 strategies to reduce e-commerce return rates
Preventing unnecessary e-commerce returns requires a mix of operational discipline, data-led insights, and customer-first thinking. The following strategies can help businesses move beyond reactive refunds to proactive solutions.
Create accurate and detail-rich product descriptions
Clear, precise product descriptions set expectations before purchase. Outlining dimensions, materials, specifications, and package contents reduces disputes later. Detailed information also helps customers compare options and make confident decisions.
Enhance product visuals with images and videos
Visual clarity prevents misunderstandings. High-resolution images, 360-degree views, and demonstration videos allow buyers to see exactly what they will receive. Customers who can visualise a product in context are less likely to be disappointed.
Offer dynamic and reliable sizing guides
Size-related returns drain margins. Interactive size charts and AI-based recommendations help customers choose correctly. Dynamic guides that account for body types and product fit minimise uncertainty and improve confidence.
Leverage the power of customer reviews
Reviews provide real-world validation. Verified ratings, visual testimonials, and Q&A sections enable shoppers to learn from others’ experiences. Encouraging honest feedback not only builds credibility but also highlights areas for product or service improvement.
Promote exchanges to retain sales
Encouraging exchanges instead of refunds helps preserve revenue and customer relationships. By making the process simple and transparent, businesses can retain sales and boost loyalty.
Improve packaging and delivery experience
Packaging must balance protection with presentation. Durable materials prevent shipping damage, while branded unboxing adds value. Combined with clear delivery timelines and reliable logistics, these steps ensure items arrive in perfect condition and on time.
Personalise recommendations using AI
AI-driven tools match customers with the right products. From personalised fit suggestions to tailored recommendations, predictive technology reduces mismatches and strengthens satisfaction. By anticipating needs, businesses can bring down their average e-commerce return rates.
Strengthen customer support and communication
Transparent communication builds trust. Proactive order updates, responsive live chat, and helpful post-purchase guidance reassure customers at every stage. Strong support prevents small issues from escalating into full returns.
Analyse return data to optimise returns
Data analytics reveals hidden patterns behind returns. By studying these reasons, businesses can identify recurring quality issues, supplier gaps, or even fraudulent behaviour. These insights help refine sourcing, improve policies, and reduce long-term return volumes. This is the core of e-commerce returns optimisation: using reason codes, SKU-level return rates and customer history to decide what to fix, what to restock and where to route each returned item.
Design flexible yet controlled return policies
Returns are inevitable, but policies shape customer trust. Easy-to-understand guidelines and liberal exchanges build loyalty, while fair controls prevent abuse. Well-balanced policies make customers feel valued, even when a return is necessary, The stakes are high: NRF found that 71% of consumers are less likely to shop again with a retailer after a poor returns experience.
How to lower apparel return rates
Apparel and footwear carry the highest return rates in e-commerce because fit, fabric and colour are hard to judge on screen. Fashion retailers can bring returns down by:
- Publishing garment measurements, not just size labels, with fit notes such as "runs small"
- Offering fit-prediction or virtual try-on tools that suggest a size from past purchases or body measurements
- Using true-to-life colour photography and fabric close-ups
- Reducing bracketing (ordering several sizes to return the extras) with fit guidance at checkout rather than restrictive policies
- Feeding return reason codes back to design and sourcing teams to fix recurring fit issues
How can Infosys BPM help reduce e-commerce returns?
Technology is a powerful enabler, helping businesses lower e-commerce return rates. Predictive analytics, AI-driven quality control, fraud detection, and integrated inventory platforms minimise errors and protect margins. Infosys BPM brings these capabilities together through comprehensive digital-first e-commerce solutions. Infosys BPM offers diverse e-commerce offerings spanning product data management, e-commerce operations, marketplace services, and more. These enable companies to improve efficiency and drive sustainable growth while keeping the average e-commerce return rate under control. Infosys BPM has built more than 100,000 product catalogues and manages more than 10 million SKUs, improving product search accuracy by around 30% and reducing abandoned carts by around 10%. See how it transformed Amazon listings for a better customer experience.
Turning returns into a growth lever
E-commerce returns are more than just an operational issue; they influence profit, brand reputation, and long-term customer loyalty. By understanding root causes and leveraging proven strategies, businesses can lower the average e-commerce return rate. Leveraging technology and focusing on customer-centric practices ensures decision-makers not only protect margins today but also shape future-ready operations. While returns are inevitable, proactive strategies can allow businesses to transform them into opportunities for stronger relationships and sustainable growth.
Frequently asked questions
Reverse logistics optimization lowers costs by using AI to intelligently route returned items to the nearest resale point, refurbishment center, or recycling facility. Instead of shipping every item back to a central warehouse, this decentralized approach reduces transportation mileage and accelerates the "time-to-resale" for A-grade inventory. Consequently, retailers can recover value faster while minimizing the carbon footprint and shipping expenses associated with each return. Read more about the role of reverse logistics in e-commerce returns.
Beyond the refunded amount, each return carries shipping, inspection, repackaging, markdown and customer service costs, and some items cannot be resold at full price. This is why preventing avoidable returns usually saves more than processing returns faster.
Analyzing return reason codes is critical because it reveals systemic product flaws—such as "runs small" or "fabric tears easily" - that sales data alone cannot detect. By feeding this structured feedback loop directly to manufacturing and design teams, businesses can correct sizing charts or upgrade materials in future production runs. This proactive quality control prevents future dissatisfaction, protecting brand reputation and long - term customer loyalty.
Charging for returns can cut low-value returns, but it can also cost sales: NRF found that 82% of consumers see free returns as a major purchase consideration. Many retailers keep exchanges or returns for loyalty members free while charging a small fee for refunds by mail.
