Returns and ecommerce – 5 facts and figures for 2025
Returns are the double-edged sword of ecommerce: a convenience for customers but a headache for retailers.
As online shopping now accounts for over a quarter of all retail transactions in the UK, the challenge of managing returns is bigger than ever. As of 2024, online shopping constitutes approximately 26.5% of all retail transactions in the UK, reflecting a significant shift in consumer behavior.
Below, we break down five key insights into the returns landscape in 2025—and what they mean for your business.
1. 1 in 5 online purchases are returned
The average return rate for online retailers has climbed to 20%, with some categories, such as fashion, seeing rates as high as 26%. This highlights just how significant returns are as an operational challenge: for every 100 orders processed, 20 need to be re-shelved, repackaged, or written off.
While technology like ERP software is vital for streamlining returns and enabling a smooth, efficient process, it’s equally valuable for identifying trends that lead to returns in the first place. By analysing return data, businesses can uncover patterns—such as frequently returned items due to faults, inaccurate sizing, or unclear product descriptions—and address these issues proactively.
2. Gen Z are driving a 'bracketing' boom
A key driver of rising return rates is the purchasing behaviour of younger consumers. Among Gen Z shoppers, 69% admit to “bracketing”—buying multiple sizes, colours, or styles with the intention of returning most of their order.
For retailers, this behaviour highlights the importance of pre-empting returns wherever possible. Tools like virtual fitting rooms, improved size guides, and detailed product descriptions can reduce the likelihood of dissatisfaction. Moreover, communicating sustainability initiatives, such as discouraging over-ordering, could also help temper consumer behaviour while aligning with broader ESG goals.
3. 7.5% of online returns are fraudulent
Fraudulent returns continue to eat into profit margins, with practices like “wardrobing” (purchasing an item, wearing it once, and returning it) being a common issue (Soocial). More sophisticated scams, such as returning items of equivalent weight but different value, also remain a concern.
To counteract these losses, retailers are adopting data-driven approaches to identify high-risk returns, integrating fraud detection tools, and tightening their return policies. For example, marking frequently abused items with stricter return windows or requiring original packaging can deter opportunistic fraudsters.
4. Free returns are now a non-negotiable standard
While charging for returns might seem like a way to offset costs, research shows it’s a significant deterrent for customers. 60% of UK shoppers would hesitate to buy from retailers that don’t offer free returns.
Offering free returns isn’t just a customer service feature—it’s a trust signal. For retailers, the challenge lies in balancing this expectation with operational costs. Solutions such as encouraging exchanges over refunds, offering incentives for customers to keep items, or introducing AI to improve sizing recommendations can help reduce return volumes without alienating customers.
5. £5 billion pounds of returns end up in landfill
Ecommerce returns have a significant environmental impact, with 5 billion pounds of returned goods ending up in landfill annually and contributing to 15 million metric tonnes of CO₂ emissions globally. As returns rise, so does the pressure on retailers to reduce waste. Encouraging exchanges, reselling returned items, and adopting circular economy practices can help businesses tackle this issue while meeting the expectations of eco-conscious shoppers.
Taking control of returns
Returns are an inevitable part of eccommerce, but they don’t have to be a drain on resources. With the right tools, processes, and customer-centric strategies, retailers can minimise return rates, reduce losses, and maintain customer loyalty. Whether it’s leveraging technology, refining return policies, or improving product descriptions, addressing the returns challenge head-on is key to staying competitive in 2025’s fast-evolving retail landscape.