As an e-commerce business, you’re no stranger to returns. E-commerce returns have become as inevitable as finding an odd sock in your laundry. This is further confirmed by the fact that 39% of online shoppers admit to returning at least one purchase per month, contributing to the nearly $744 billion worth of merchandise returned in the U.S. last year—a figure that could fund a small country’s GDP.
Interestingly, online purchases are returned at a rate of 30%, compared to just 8.89% for physical stores. The top culprits? Receiving the wrong item (23%), products looking different than expected (22%), and damaged goods (20%).
Knowing what your customers’ top return reasons are is the first step to mitigating the impact of growing returns. And that’s what we’ll discuss here. As we delve into the top reasons behind these returns, we’ll uncover insights to help you transform potential pitfalls into opportunities for customer satisfaction and loyalty.
Impact of Returns on Businesses
Returns can do a real number on e-commerce businesses. From squeezing profit margins with added shipping costs to complicating logistics and tarnishing customer loyalty, the ripple effects of returns are far-reaching.
Beyond the financial strain, returns can impact future revenue, with dissatisfied customers less likely to return and more likely to leave negative feedback. Here’s a look at how returns influence businesses.
Financially Draining Due to the Cost of Shipping
The NRF reports that returns cost retailers approximately $400 billion annually in the US alone. Returns can be financially draining for businesses due to the cost of shipping. Not only do you lose the revenue from the returned product, but you also incur operational expenses—handling return shipments, processing refunds, and restocking items.
This adds up quickly and affects your profit margins. In many cases, the shipping cost alone
Hampers Future Revenue
Returns have a long-term impact on future revenue by damaging customer satisfaction. When customers return items, they’re often dissatisfied, which can lead to fewer repeat orders. Negative feedback or reviews can also deter other potential customers, dissuading them from purchasing from your store.
Word-of-mouth, both positive and negative, can significantly influence purchasing decisions, meaning returns can cause a ripple effect, ultimately hurting your business’s reputation and bottom line. While you cannot wholly weed out returns, you can streamline the process by onboarding a returns experience management solution to ensure your customers have a smooth returns process and preserve revenue.
Poses Logistical Challenges
Returns create logistical headaches for businesses. First, you must verify each return request, ensuring it’s legitimate. Then, you need to arrange the return of the product, inspect it for damage, and decide whether to restock it, send an exchange, or issue a refund.
Managing all these steps takes time, resources, and careful coordination. When returns pile up, it can strain your operations, disrupt inventory flow, and increase costs, making the process more cumbersome than it initially appears.
11 Most Common Return Reasons
Returns happen for all kinds of reasons—some predictable, others downright surprising. Whether it’s a jacket that doesn’t fit quite right or a gift someone’s not-so-secretly re-gifting, each return tells a story.
By uncovering the most common reasons customers send items back, businesses can better understand their pain points and fine-tune their strategies to keep those return rates in check. Let’s dive into the top 11 return reasons and what they reveal about customer expectations.
1. The product doesn’t fit well
When it comes to returns, ‘The product doesn’t fit’, takes the crown as one of the most common reasons. A recent consumer survey found that a whopping 70% of customers send items back because they don’t fit quite right. While this is most famously a fashion dilemma—think shoes a size too tight or a jacket that feels like a tent—it also extends to home furnishings.
Carpets that seem to shrink in your living room or a mattress that doesn’t quite match your bed frame can be common offenders for returns. Fit issues are often a blend of expectation versus reality and can be frustrating for customers and businesses alike.
2. The product doesn’t match the online description
The next refund reason is the delivered product does not match the online description. Customers expect the item they see on your website to be exactly what they receive—and when that expectation isn’t met, return requests quickly follow. 49% of customers say they have returned an item because it didn’t match the online description.
Whether it’s the color, size, or features, discrepancies between what was promised and what arrived are major deal-breakers. For instance, a ‘beach blue’ shirt may look a lot more like ‘navy blue’ once it’s out of the box.
It’s not necessarily a quality issue—it’s about the disconnect between what the customer was made to believe and what they received.
3. The product is defective or damaged
Receiving a defective or damaged product is a return reason that’s as unfortunate as it is common. In fact, 20% of customers return items that they received damaged. It’s one of those scenarios where the customer’s excitement quickly turns into disappointment—imagine unboxing a shiny new gadget only to find it’s got a scratch or doesn’t work as expected.
Whether it’s a cosmetic flaw or a technical malfunction, these returns are often unavoidable and understandably frustrating for customers. The damage or defect may occur during shipping or be a product-specific issue, but either way, it makes for a good reason to return an item.
4. The wrong product was delivered
23% of customers return products because they received the wrong item. This is the most black-and-white reason for returning out there.
Whether it’s a mix-up in the warehouse, a mismatch in the order fulfillment system, or just a little human error, customers sometimes find themselves holding a product they didn’t order.
Imagine ordering a sleek new blender, only to unwrap a set of kitchen knives instead. While this is rarely intentional, it does lead to confusion and frustration on the customer’s part. And the only logical recourse is to return the item.
5. The product doesn’t meet customer expectations
Another common return reason is that the product simply didn’t live up to the customer’s expectation. After eagerly awaiting their purchase, customers may find the item just isn’t as impressive in person as it was online—whether the material feels off or the fit doesn’t match the description. While this can stem from impulse buys or overly ambitious expectations, it’s important to note that this reason for return often has little to do with quality issues.
It’s more about the gap between what the customer anticipated and what they actually received. For e-commerce businesses, this means managing expectations is key, as customers’ idealized visions of a product don’t always align with reality.
6. The customer purchased the wrong item
Purchasing the wrong item is a classic return reason in e-commerce, and it happens more often than you’d think. Whether it’s due to a quick click on the wrong size or a mix-up between similar-looking products, customers occasionally end up with something they didn’t intend to buy.
This is particularly common in categories like electronics, where models and specifications can get confusing, or home furnishings, where subtle differences matter—a ‘queen’ instead of a ‘king’ bedspread, for instance. These returns aren’t about your product or service but rather the customer’s momentary oversight.
7. The customer doesn’t want the product anymore
One of the more perplexing return reasons for e-commerce businesses is when customers simply change their minds. It’s not about your product, delivery schedule, or service—it’s just that they no longer want the item. While it might seem frustrating, this is a common occurrence.
Sometimes, customers stumble upon a better alternative—a similar product at a more attractive price or with features they prefer. Other times, circumstances shift. For example, a customer might buy hiking boots for an upcoming trip only to cancel the trip and decide the boots are no longer needed. While outside your control, these scenarios can be acceptable reasons for return.
8. The product is challenging to use
Products that are challenging to use often end up back on the return shelf, making this a notable reason for customer dissatisfaction. This usually happens with complex items or when first-time buyers encounter unexpected hurdles. Take exercise equipment, for example—treadmills and dumbbells may seem intimidating for beginners who aren’t quite ready to commit.
Similarly, items like sofa sets with perplexing setups or DIY (Do It Yourself) air compressors with vague instructions can leave customers scratching their heads or pulling out their hair. While these products might be fantastic once mastered, initial frustration can make a good reason for returning an item. For businesses, understanding this trend is essential for improving the onboarding experience and ensuring customers feel confident with their purchase from the start.
9. The order was delivered too late
A recent customer survey finds that 10% of consumers return items due to a delay in delivery. This is particularly common when purchases are made for a specific event or purpose. Timing is everything, and when an order arrives too late, its value often diminishes.
Imagine this: Pam orders a farewell gift for Dwight before he heads off to Florida to launch the Sabre store. If the gift arrives after Dwight’s departure (don’t worry, he’ll be back), it’s no longer useful for its intended purpose. Naturally, Pam would request a return.
10. The customer wants to return the gift they received
The festive holiday season is a goldmine for e-commerce businesses—until it isn’t. While sales skyrocket, so do returns. According to the National Retail Federation (NRF), the 2024-25 holiday season is projected to see a 17% spike in returns, with January claiming the top spot for returned items—creating a post-holiday phenomenon fondly known as ‘Returnuary.’
One major culprit? Gift returns. Customers often receive well-intentioned presents that miss the mark—a sweater three sizes too big or yet another coffee maker. However, when these less-than-perfect gifts land in your returns queue, it’s not all bad news.
Gift returns are common during festive times, offering businesses a unique chance to engage with customers and turn returns into future opportunities. Think exchanges and store credit—we’ll discuss this in detail ahead.
11. The customer already owned the product
Last but not least, duplicate item purchases are a common reason for product returns in e-commerce. Whether it’s a case of forgetting they already own the product or a gift gone awry, duplicate purchases can happen to the best of us.
Customers may unintentionally order an item they already own, often due to oversight or confusion during the buying process. This is particularly prevalent during busy shopping seasons, sales events or heavy discounts. For businesses, such returns provide insight into purchasing patterns and highlight the importance of clear order tracking and communication to help customers avoid unnecessary repeat purchases.
Strategies for Reducing Returns
Reducing returns isn’t just about saving costs—it’s about creating happier, more confident customers. By addressing common return triggers proactively, businesses can minimize the back-and-forth while building trust and loyalty. From enhancing product descriptions to streamlining the returns process, the right strategies not only reduce return rates but also drive the overall shopping experience.
Let’s explore some strategies that can turn the tide on returns and keep your business thriving.
Optimize Your Product Descriptions and Specifications
Optimizing product descriptions, adding detailed visuals, and including clear specifications can significantly reduce returns. By offering accurate, comprehensive details—like measurements, fabric descriptions, or size guides—you help manage customer expectations and mitigate common issues, like fitting problems.
Visuals, especially close-up shots and videos, give customers a realistic view of what they’re buying, making them less likely to be surprised (and disappointed) when the product arrives. A little extra effort right at the beginning can lead to fewer returns and satisfied customers in the long run.
Offer Education on Product Utilization and Maintenance
Offering educational material on product utilization and maintenance can significantly reduce returns, especially for items that may be difficult to use at first. By providing clear guides, how-to videos, or troubleshooting tips, you help customers feel more confident with their purchases.
It’s akin to giving them a roadmap—without it, they might get lost and end up returning the product. Empowering customers with knowledge enhances their experience and cuts down on frustrating return requests.
Double down on Effective Packaging
Packaging isn’t just about looking pretty—it’s a key factor in reducing returns. When products are packed securely, the chances of them arriving damaged are significantly lower, which means fewer returns for you.
Think of it like a VIP trip for your product—proper cushioning and sturdy packaging ensure your item arrives in a shining, pristine condition, ready to impress. Effective packaging is a simple but powerful way to avoid unhappy customers and keep your return rates in check. And while you’re at it, add a quick note thanking your customer for the purchase—it’s sure to help make a good impression
Consider Levying a Return Fee for Certain Behaviors
Levying a return fee for certain behaviours (consecutive or frequent returns without a valid reason or buyer’s remorse) can help reduce returns, but it’s more of a last resort. After all, 79% of customers expect free return shipping, so introducing fees needs to be handled carefully. If used too aggressively, it could sour the customer experience.
The trick is to strike the right balance—ensuring customers are still motivated to buy but not so comfortable with returning that it becomes a habit. Just like adding a pinch of salt, it should enhance, not overpower.
Offer Store Credit and Exchanges
Offering store credit and exchanges is a smart way to tackle returns without losing revenue. Whether customers are returning items because they don’t fit, received a damaged product, made a purchase mistake, or got the wrong item delivered, offering an exchange or store credit keeps the transaction within your ecosystem.
This approach not only retains the customer’s business but also helps prevent that dreaded revenue loss, turning a return into an opportunity for future sales.
Onboard a Returns Management Software
The last and probably the most effective strategy to address the above-mentioned return reasons is integrating returns management software. A returns management solution is a tool that automates the entire customer returns management process from head to toe. While there are a few in the market, the one that should make it to your tech stack is LateShipment.com’s Returns Experience Software.
Here are some of its notable benefits:
- On-brand Returns Portal: Create an on-brand returns portal that your customers can access through a widget on your website. This doesn’t just help you facilitate a smooth returns experience for your customers but also gives you a chance to make personalized product recommendations and upsell to your customers, ensuring they remain engaged.
- Customizable Returns Policy: This tool helps you create a unique return policy for your e-commerce business and even facilitates return windows as per the policy for a quick and efficient returns process.
- Downloadable Return Labels: Your customers don’t have to hunt for return labels or struggle to return items. The software generates return labels with detailed instructions to facilitate a hassle-free experience.
- Keeps Customers Updated: Share personalized and timely updates with your customers to keep them in the loop regarding the returns process.
- Seamless Integration: LateShipment.com’s delivery experience management solution offers 1200+ native integrations with tools like Klaviyo, Gorgias, ShipStation, and multiple carriers like FedEx and DHL.
Integrate LateShipment.com into your post-purchase experience and supercharge your customer engagement.
Conclusion
Returns are a fact of life in the e-commerce world, but they don’t have to be an e-commerce business’s Achilles’ heel. By understanding the common reasons behind returns—whether it’s an ill-fitting product, unmet expectations, or even a change of heart—businesses can take proactive steps to turn these challenges into opportunities. The right strategies can significantly reduce return rates and improve customer satisfaction, from optimizing product descriptions and educating customers to leveraging store credit options and integrating a returns management solution.
This is especially imperative as the impact of returns goes beyond financial losses—it’s a matter of reputation and customer loyalty. A seamless returns experience can not only mitigate these losses but also transform a dissatisfied buyer into a loyal advocate.
This is where LateShipment.com’s Returns Experience Management software shines. It simplifies the complexities of returns, streamlining your returns process with regular communication with customers, on-brand returns tracking portal, downloadable labels, and more—with the ultimate aim of facilitating a hassle-free, transparent, and customer-friendly experience. With advanced insights and seamless integration with leading business tools such as Klavio, Gorgias, and Shippo, LateShipment.com helps you reduce the burden of returns while enhancing customer loyalty.
The bottom line? Returns don’t have to be a setback. With the right approach and tools, they can become a stepping stone to building stronger, more trusting relationships with your customers. Supercharge your returns process with LateShipment.com.
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