Returns have always been an integral part of retail, but the rapid growth of ecommerce has amplified their significance, making them a central focus for both retailers and consumers in 2025. The InternetRetailing Returns Report 2025 delves into the innovative strategies retailers are employing to mitigate the impact of returns on their profitability, customer satisfaction, and the planet. Inside we highlight how technology, from informed decision-making to AI tools, is enhancing efficiency and improving the overall customer experience in the returns cycle.
Inside the report:
- Market context: Explores the staggering increase in ecommerce return rates (up to three times higher than brick-and-mortar), significant costs for retailers (7% of gross sales), and challenges like sizing issues in fashion (60-70% of returns due to sizing). It also examines emerging trends like charging for returns (e.g., Zara, New Look) and the adoption of AI-powered tools.
- Consumers: Consumer demand for easy, fast, and free returns, emphasises the critical role of rapid refunds in customer loyalty. We explore negative consumer behaviours such as bracketing and wardrobing, and the rising threat of returns fraud, costing UK retailers £1.3bn annually.
- Restocking & reshopping: We discuss how retailers manage returned goods, highlighting the benefits of physical returns locations and the use of AI-based “triage” systems to quickly grade items (e.g., Grade A for resalable) and automate their routing, significantly reducing processing times.
- Sustainability: We shed light on the environmental cost of returns, including 24mn metric tonnes of CO2 emissions annually and the fact that 44% of returned goods never reach another consumer. The report showcases circular economy initiatives, such as repairs, refurbishment, and recommerce, that promote more conscious handling of unwanted items.
- Recommerce: The resurgence of second-hand shopping and how retailers are utilising “Reverse Commerce” strategies—through their own platforms (e.g., Zara, Levi’s, Oh Polly) or partnerships—to generate revenue from returned items and minimise waste.
