The Best Practices and Costs of Ecommerce Returns

Ecommerce returns: Why they matter for your business

Every ecommerce business celebrates a new order. But what happens when that order comes back?

Ecommerce returns are products that customers send back after purchase through reverse logistics, the process of moving items from the customer back to your business for inspection, restocking, exchange, resale, or disposal.

Returns can be chaotic. Your return experience doesn't have to be.

A fast, transparent returns process can build trust, encourage repeat purchases, and protect your bottom line. A frustrating one can send shoppers to a competitor instead.

In 2024, US retailers handled $890 billion in returned merchandise. Of the nearly $1.5 trillion in online sales that year, 24.5% of purchases were returned, making a thoughtful returns strategy and a clear understanding of your ecommerce return rate more important than ever.

What is the average ecommerce return rate?

According to Capital One Shopping's 2026 research, the average ecommerce return rate is 24.5%. In other words, nearly one in every four online purchases finds its way back to the retailer.

That's a big number. But it isn't the whole story.

If you've seen different return rate benchmarks, you're not imagining things. Industry studies often report different averages because they measure different retailers, product categories, and shopping behaviors. A fashion brand, for example, is likely to see far more returns than a consumer electronics retailer. That's why the most useful benchmark isn't the industry average. It's how your business compares with others in your category.

An ecommerce return rate measures the percentage of sold items that customers return. To calculate it, divide the number of returned items by the total number of items sold, then multiply by 100.

Formula: Ecommerce return rate = (Items returned ÷ Items sold) × 100

Average return rates by product category.

Not all products are returned at the same rate.

Think about the last time you ordered clothes online. If the fit wasn't quite right, returning them was probably part of the plan. Compare that with a phone charger or a book, where returns are much less common.

Statista Consumer Insights found that clothing and shoes are the most frequently returned online purchases, while categories like cosmetics and body care tend to see fewer returns.

Why do customers return online purchases?

Most reasons for returns come down to one simple problem: the product doesn't match the customer's expectations.

Whether it's the wrong size, a different color than expected, or damage during shipping, customers return products when what arrives doesn't match what they thought they were buying. The good news is that many of these returns are preventable with better product information, accurate fulfillment, and a clear returns process.

The most common reasons customers return online purchases include:

Item doesn't match the description or photos.

A product that isn't as advertised is one of the most common reasons customers return online purchases. If a product arrives with unexpected features, colors, materials, or functionality, customers are far more likely to request a refund or exchange. Clear product descriptions, accurate photos, and customer reviews help set expectations before checkout.

Wrong size or fit.

Sizing issues are one of the biggest drivers of ecommerce returns, especially for apparel and footwear. Detailed size charts, fit guidance, customer reviews, and user generated photos can help shoppers choose the right product the first time.

Broken or damaged in transit.

Products damaged during shipping almost always result in a return or replacement. Protective packaging, reliable shipping partners, and quality control checks can reduce damage before orders reach customers.

Poor product quality.

Low quality products quickly erode customer trust. If an item doesn't perform as expected or shows signs of poor craftsmanship, customers are unlikely to keep it and may hesitate to purchase from your brand again.

Delivery or international shipping problems.

Shipping issues can turn an otherwise successful sale into a return. Delays, customs issues, incorrect deliveries, and damaged packages become more common as shipping distances and complexity increase.

Changed mind or buyer's remorse.

Sometimes customers simply decide they no longer want the product. Impulse purchases, changing preferences, or finding a better alternative after ordering can all lead to a return, even when nothing is wrong with the item.

Bracketing or accidental duplicate orders.

Some customers intentionally order multiple versions of the same product knowing they'll return what they don't keep. This practice, known as bracketing, is especially common for apparel and footwear. Other returns happen because shoppers accidentally purchase duplicate items. Both behaviors increase return costs and can create opportunities for return fraud, topics we'll cover later in this guide.

The true cost of ecommerce returns

Processing a single return can cost retailers anywhere from 20% to 65% of an item's original value.

And the refund is only part of the equation.

Every returned item sets off a new round of reverse logistics costs, from shipping and inspections to restocking, resale, or disposal. As return volumes continue to grow, understanding the full cost of returns is essential for protecting your margins.

The biggest costs of ecommerce returns include:

Shipping and transportation.

Every return requires another trip through the supply chain.

Whether your business pays for return shipping or the customer does, moving products back through warehouses and carriers adds transportation, packaging, and handling expenses. International returns can be even more expensive due to customs, duties, and longer transit times.

Labor, intake, and restocking.

Each return must be received, inspected, processed, and restocked or routed for disposal. That additional labor increases your return processing cost, especially during peak shopping seasons when return volumes surge.

Inventory teams also spend time updating stock levels, issuing refunds, and preparing products for resale.

Markdowns and unsellable inventory.

Not every returned product can go back on the shelf.

Opened, damaged, seasonal, or discontinued merchandise may need to be discounted, refurbished, liquidated, or written off entirely. Even products in like-new condition often require new packaging or quality inspections before they can be resold.

Hidden costs: Fraud, customer churn, and sustainability.

Some of the most expensive returns never appear on a balance sheet.

Return fraud, including wardrobing and false claims, increases operational costs. A confusing returns process can also frustrate customers and reduce repeat purchases. On top of that, every additional shipment contributes to packaging waste and transportation emissions, making returns an environmental challenge as well as a financial one.

The rise of return fees.

To offset rising costs, many retailers have introduced return fees or shorter return windows.

While these policies can reduce return volume and recover some operational expenses, they can also discourage purchases if customers perceive the return process as inconvenient. The right approach depends on your products, customer expectations, and overall brand experience.

How to handle ecommerce returns

An effective returns process starts long before a product makes its way back to your business.

The goal isn't just to issue a refund. It's to make the experience easy for customers while keeping costs under control.

Reverse logistics is the process of moving products from the customer back to your business for inspection, restocking, exchange, recycling, or disposal. Unlike in store purchases, ecommerce returns require a structured workflow to get products back into your inventory or out of your supply chain as efficiently as possible.

A typical ecommerce returns process looks like this:

1. Initiate the return: Customers request a return through a self service portal or customer support. At this stage, businesses typically generate a return merchandise authorization, or RMA, to track the return.

2. Review eligibility: Confirm the return meets your policy requirements, such as the return window, product condition, and proof of purchase.

3. Provide return instructions: Send a prepaid shipping label or clear instructions so customers know exactly how and where to return the item.

4. Inspect and process the return: Once the item arrives, inspect its condition, update inventory, and determine whether it can be restocked, refurbished, or discarded.

5. Resolve the return: Complete the process with a refund, exchange, or store credit, and keep the customer informed throughout each step.

Depending on your business model, there are several ways to manage returned inventory.

Return to your warehouse.

Best for: Businesses that manage their own inventory and fulfillment.

Returning products to the original warehouse makes inspection, restocking, and inventory updates more efficient because everything happens in one location.

Return to a brick and mortar location.

Best for: Omnichannel retailers with physical storefronts.

Allowing customers to return online purchases in person creates a more convenient experience while reducing shipping costs and getting eligible products back on shelves faster.

Use a 3PL or fulfillment service.

Best for: Businesses that outsource fulfillment.

Many third party logistics providers can also manage reverse logistics, helping businesses handle returns, inspections, and restocking without adding operational complexity. If you use services like Amazon FBA or another fulfillment partner, make sure your returns workflow aligns with their processes and policies. Learn more about Amazon FBA to understand how fulfillment partners can streamline returns at scale.

Ecommerce returns best practices

You can't eliminate every return. But you can create a customer experience that builds trust, protects your margins, and encourages customers to shop with you again.

Here are seven ecommerce returns best practices every online business should consider.

Make your return policy easy to find and understand.

A clear ecommerce return policy can influence purchasing decisions before a customer ever clicks "Buy."

Many shoppers review a retailer's return policy before completing a purchase, making it a valuable conversion tool instead of just a support document. Keep your policy easy to find, explain eligibility and timelines in plain language, and avoid unnecessary fine print. Retailers like Costco have built customer loyalty in part through transparent, customer friendly return policies.

Write accurate product descriptions, sizing, and photos.

Set expectations before the sale.

Detailed product descriptions, accurate sizing information, high quality photos, videos, and customer fit guidance help shoppers make informed decisions and reduce returns caused by mismatched expectations. Just as important, products should be packed securely and appropriately to minimize damage during shipping.

Offer exchanges or store credit before refunds.

Give customers options beyond a refund.

When an exchange or store credit solves the customer's problem, you keep the sale while helping the customer find the right product. This approach can improve retention while reducing the revenue impact of returns.

Use reviews and Q&A to set expectations.

Let your customers help future customers.

Authentic reviews, photos, and product questions provide real world context that product descriptions alone can't capture. Retailers like Amazon and Zappos have shown how customer generated content helps shoppers buy with confidence and reduces surprises after delivery.

Keep customers informed throughout the returns process.

Communication doesn't end after a return is initiated.

Provide tracking updates, confirmation when a return is received, and clear timelines for refunds, exchanges, or store credit. Keeping customers informed reduces support requests and builds confidence in your brand.

Make the returns process sustainable.

Every return has an environmental impact.

Use right sized packaging to reduce waste, and whenever possible, return eligible products to your sales inventory instead of sending them to a landfill. Small improvements throughout your reverse logistics process can reduce both costs and environmental impact. For more tips, see our guide to ecommerce shipping.

Decide your stance on free versus paid returns.

There's no one size fits all approach.

Free returns can increase customer confidence and improve conversion rates, but they also increase operational costs. Charging for returns may reduce unnecessary returns and discourage abuse, but it can also create friction during the buying process. The right policy depends on your products, margins, and customer expectations.

Returns management software and automation

Returns management software helps businesses automate the returns process, from return requests and shipping labels to refunds, exchanges, and restocking.

As your business grows, managing returns manually becomes more time consuming and expensive. The right tools can streamline repetitive tasks, improve the customer experience, and reduce the labor required to process every return. Just as importantly, they can uncover trends that help you prevent returns in the first place.

What a returns management system does.

A modern returns portal gives customers a simple, self-service way to initiate returns while helping your team process them more efficiently.

Many returns management platforms can automate tasks such as:

• Checking return eligibility based on your return policy, order date, and product type

• Generating prepaid shipping labels and return instructions automatically

• Routing customers to the appropriate resolution, whether that's a refund, exchange, or store credit

• Updating inventory and restocking products once returned items are inspected

• Tracking return analytics to identify trends, such as frequently returned products, sizing issues, or recurring product defects

Together, these capabilities support returns automation, helping reduce manual work while creating a faster, more consistent experience for customers. The data collected through your returns process can also help improve product descriptions, sizing guides, inventory planning, and merchandising decisions, ultimately reducing future return volume.

Returns apps and integrations.

Your returns process shouldn't operate in isolation.

Many ecommerce businesses connect returns software with their ecommerce platform, shipping providers, warehouses, and inventory systems to automate reverse logistics from start to finish.

BigCommerce integrates with returns and fulfillment solutions such as AfterShip Returns and ShipBob, allowing businesses to manage returns alongside shipping, inventory, and order fulfillment workflows. You can also connect returns data with your broader ecommerce operations to improve inventory accuracy and customer service. Learn more about ecommerce logistics and B2B order management to see how connected systems simplify post purchase operations.

Looking ahead, AI-powered shopping assistants are beginning to take on more post-purchase tasks, including initiating returns and communicating with retailers on behalf of customers. While this creates new opportunities to automate routine workflows, it also introduces new considerations around authentication and return fraud, making thoughtful oversight just as important as automation.

How to prevent ecommerce return fraud

In 2025, approximately 11% of online returns were classified as abusive, according to Signifyd.

Not every return is legitimate.

While most customers simply want to exchange or return a product, ecommerce return fraud and return abuse continue to grow as retailers make returns faster and more convenient. The key is protecting your business without making honest customers jump through unnecessary hoops.

Common types of return fraud.

Some forms of return abuse are opportunistic, while others are intentional. Common examples include:

• Wardrobing: Buying an item, using or wearing it, then returning it for a full refund.

• Bracketing abuse: Ordering multiple sizes, colors, or variations with the intention of returning most or all of them. While bracketing itself isn't always fraudulent, repeated abuse can drive up costs.

• Empty box returns: Sending back an empty package or one that doesn't contain the purchased item while claiming a refund.

• Item swapping: Returning a different, damaged, or used product instead of the original purchase.

• Serial returns: Repeatedly making purchases with unusually high return rates that fall outside normal customer behavior.

How to detect and flag return abuse.

The goal isn't to scrutinize every customer. It's to identify patterns that deserve a closer look.

Look for signals such as:

• High return rates across multiple orders

• Frequent returns of high value products

• Mismatched items or missing products in returned packages

• Multiple customer accounts linked to the same shipping address or payment method

• Unusual spikes in return requests or refund claims

Many retailers also use risk based verification during the RMA process, requiring additional review only when a return appears suspicious. This approach helps reduce fraud while keeping the experience simple for legitimate customers.

Balance fraud prevention with the customer experience.

The easiest way to reduce fraud isn't always the best way to grow your business.

Strict return policies, blanket fees, or excessive verification requirements can discourage abuse, but they can also frustrate loyal customers and reduce conversion. A better approach is to apply additional checks only when risk signals are present.

As AI-powered shopping assistants and other automated tools become more common, retailers should also prepare for new forms of fraud that can operate across multiple accounts at scale. Investing in smarter detection tools while maintaining a customer friendly returns experience helps protect both your margins and your brand.

The final word

Ecommerce returns aren't just a cost of doing business. They're an opportunity to improve your customer experience, strengthen your operations, and build long term loyalty.

The most successful ecommerce businesses don't focus on eliminating returns altogether. They focus on understanding why returns happen, reducing preventable ones, and making the returns process as simple and efficient as possible for everyone involved.

If you're looking for a place to start this quarter, focus on these three actions:

1. Review your ecommerce return policy. Make sure it's easy to find, easy to understand, and clearly explains return eligibility, timelines, and refund options.

2. Implement a returns workflow or self service portal. Capture return reason codes so you can spot trends, automate repetitive tasks, and improve the customer experience.

3. Address your biggest return driver. Whether it's sizing, product descriptions, photos, or packaging, fixing the root cause can reduce return volume and improve customer satisfaction over time.

As your business grows, the right ecommerce platform and integrations can help you streamline returns alongside the rest of your operations. Explore BigCommerce's ecosystem of returns, shipping, and fulfillment integrations to build a returns strategy that scales with your business.

FAQs about ecommerce returns