ECommerce Returns Best Practices For Your Online Store 2025

Returns are an unavoidable part of ecommerce, but how your business handles them can make all the difference. A smooth and customer-friendly return process not only builds trust but also strengthens brand loyalty. In an era where shoppers expect hassle-free returns, businesses that optimize their return policies can turn a potential challenge into a competitive advantage.

Beyond customer satisfaction, efficient return management provides valuable insights into product quality, customer behavior, and operational efficiency. By analyzing return trends and implementing best practices, businesses can minimize unnecessary returns, reduce costs, and enhance profitability. 

This blog explores ecommerce return best practices to help businesses manage product returns effectively in 2025, streamline operations, and enhance customer satisfaction.

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Shut Down Serial Returners

Trends Shaping Ecommerce Returns Management in 2025

The Cost of Returns to Online Retailers

Here's how your e-commerce returns process impacts your business: -

• Refund Costs – E-commerce businesses lose revenue and clients due to refunds.

• Initial Shipping Costs – Online businesses pay for the shipping cost to build a long-term relationship with their buyers. Getting a return request on these products means a permanent loss in these costs.

• Product Disposition Costs – Reselling some products may not be a feasible option. Businesses can either liquidate these products or dispose of them completely. While liquidation recovers some amount, a complete disposition is a total loss.

• Return Delivery Costs – If you offer free return delivery, your operational costs will shoot up significantly. By 2020, Statista estimates a $550 billion return delivery cost in the U.S. alone.

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How To Reduce Returns in eCommerce Business in 2025: 7 Best Practices

eCommerce return management is crucial for maintaining profitability and customer satisfaction in your online business. Here are the 7 best practices to reduce ecommerce product return rates:

1. Improve Information Provided on the Site

A major reason for eCommerce returns is mismatched expectations caused by inadequate product information. In fact, 22% of customers return items because they appear differently from the photos on the website. To address this, businesses should use clear, high-resolution images taken from multiple angles, including close-up shots to highlight intricate details. Incorporating 360-degree product videos can further enhance transparency and boost customer confidence.

Beyond visuals, product descriptions must be equally comprehensive, covering dimensions, materials, weight, care instructions, and other key details that influence purchase decisions. Referencing structured guidelines from platforms like Amazon or eBay can help maintain consistency, ensuring customers make informed choices and reducing ecommerce return rates.

Related Reading: How to Write Engaging eCommerce Product Descriptions

2. Adopting a Liberal Returns Policy

While it may seem surprising, a customer-friendly return policy can actually reduce ecommerce return rates over time. Research indicates that 95% of customers are more likely to repurchase from retailers with an easy return process. Knowing they can return items hassle-free increases buyer confidence and encourages more purchases.

A more flexible return policy doesn’t necessarily lead to more returns; in fact, it can have the opposite effect due to the endowment effect. This psychological phenomenon suggests that when customers have more time with a product, they develop a stronger attachment to it, making them less likely to return it. Extending the return window to 45–90 days allows buyers to evaluate products at their own pace, leading to more informed decisions and, ultimately, fewer returns. This strategy also fosters customer trust, increasing repeat purchases and long-term brand loyalty.

3. Encourage Customer Ratings and Reviews

User-generated content, such as ratings and reviews, is crucial in minimizing returns. Research shows that 88% of customers rely on product images and videos from previous buyers before purchasing. Real-life reviews, including customer photos and videos, provide a clearer understanding of the product, building trust and reducing mismatched expectations.

Encouraging buyers to share their experiences enhances this effect. Offering incentives like discounts or loyalty points boosts engagement while strengthening brand credibility. Additionally, addressing negative feedback promptly and refining products based on customer insights can turn dissatisfaction into loyalty. Since higher-rated products generally have fewer returns, fostering authentic, positive feedback directly benefits both sales and customer retention.

4. Use Proper Size Guides

Size-related issues account for a significant portion of fashion and apparel eCommerce returns, with studies indicating that nearly 80% of returns stem from incorrect sizing. Since online shoppers can’t try on garments before purchasing, providing clear, detailed size guides is essential to minimizing returns. Each product page should feature an accurate size chart specific to the item, ideally accompanied by visuals or an interactive sizing calculator that allows customers to compare their measurements with the garment.

Beyond offering precise sizing information, accessibility is key. Ensure that size guides are visible throughout the shopping journey, including at checkout, so customers can double-check their selection before completing a purchase. Additionally, incorporating descriptions like 'True to Size,' 'Slim Fit,' or 'Relaxed Fit' alongside measurement details can further assist customers in making the right choice. Implementing these practices can significantly enhance the shopping experience while reducing costly returns.

Ecommerce Return Rates by Product Category

5. Shut Down Serial Returners

Customers who frequently return items pose a costly challenge for eCommerce businesses, contributing to billions in losses annually. Excessive or fraudulent returns strain profit margins, inflate operational costs and disrupt inventory management. To mitigate this issue, businesses should leverage customer and inventory data to track return patterns and identify high-risk shoppers. Advanced analytics tools can flag customers with unusually high return rates, allowing businesses to implement more tailored return policies.

For habitual returners, consider introducing additional measures such as requiring approval for returns, limiting the number of returns per year, or extending return windows only for loyal, low-risk customers. Platforms like Loop Returns or Narvar enable merchants to create dynamic return policies that balance customer satisfaction with business protection. By strategically setting return boundaries and communicating policies transparently, businesses can safeguard their profitability while promoting more responsible purchasing behavior.

6. Ask your Customer the Reason for Return

To effectively reduce returns, businesses must first understand why customers are dissatisfied. When initiating a return, customers should be prompted to select a reason from a dropdown list and provide optional feedback in a comment box. This simple yet powerful approach allows businesses to gather actionable insights into common return drivers, whether due to sizing inconsistencies, product defects, or misleading descriptions.

By analyzing return patterns, businesses can proactively refine product quality, enhance descriptions, or improve website functionality to better manage customer expectations. Implementing these optimizations not only reduces return rates but also builds trust and enhances the overall shopping experience.

7. Get the Order Right the First Time

Shipping the correct product the first time is one of the most effective ways to reduce returns and build customer trust. Studies show that 23% of returns result from customers receiving the wrong item, leading to frustration and potential loss of repeat business. To prevent these costly mistakes, businesses should invest in an order management system that seamlessly integrates with inventory tracking, reducing manual errors and ensuring accuracy in fulfillment.

Additionally, training warehouse staff to follow strict verification protocols such as barcode scanning and double-checking orders can significantly cut down on mis-shipments. For companies seeking an extra layer of efficiency, outsourcing fulfillment to a reliable third-party logistics (3PL) provider ensures professional handling, accurate order processing, and improved customer satisfaction.

Trends Shaping ECommerce Returns Management in 2025

Here are some of the ecommerce returns trends that are poised to streamline the return process in 2025:

1. AI-Driven Returns Prediction: Advanced AI algorithms are used to predict return likelihood based on customer behavior, product reviews, and purchase patterns, allowing businesses to proactively address issues.
2. Sustainable Returns Practices: Retailers are adopting eco-friendly return policies, such as refurbishing returned goods for resale or partnering with sustainable logistics providers to reduce environmental impact.
3. Automation in Returns Processing: Automation tools streamline return workflows, from issuing return labels to restocking items, reducing time and operational costs.
   
4. Self-Service Returns Portals: Many businesses now offer intuitive self-service platforms, allowing customers to initiate returns and track progress seamlessly, improving the overall user experience.
5. Virtual Try-Ons: ECommerce stores increasingly use AR/VR technology to reduce returns by enabling customers to "try" products virtually, particularly in apparel and furniture categories.
6. Localized Return Centers: Establishing regional return hubs helps speed up the process, minimizes shipping costs, and improves customer satisfaction.
7. Flexible Return Policies: Retailers are adapting to consumer demands for flexibility, offering extended return windows and lenient terms to foster loyalty and trust. 

Conclusion

Managing eCommerce returns and refunds is crucial for maintaining customer satisfaction, operational efficiency, and profitability. Efficient management ensures quick processing, minimizing customer frustration and fostering loyalty. If not managed well, businesses face increased operational costs, stock inaccuracies, and damaged reputations due to poor customer experiences. Inefficiencies can lead to lost sales and negative reviews.

Many businesses opt for third-party providers to handle returns and refunds due to their expertise, technology, and economies of scale. These providers offer streamlined processes, accurate tracking, and enhanced customer service, allowing businesses to focus on core activities.

Invensis specializes in efficient eCommerce returns and refunds management. With over 24 years of industry experience, our ecommerce order processing services leverage well-developed processes and experienced teams to streamline order management processes, ensuring quick and accurate handling of returns.  Contact us now to focus on growth while we handle the complexities of returns management efficiently.

Frequently Asked Questions

1. What is a good return rate for ecommerce?

A good return rate for ecommerce typically ranges between 15% to 30%. This encompasses standard industry expectations where factors like product type, customer demographics, and return policies influence rates. High return rates may indicate issues like poor product descriptions or quality, while exceptionally low rates might suggest inflexible return policies or customer satisfaction. Balancing returns ensures profitability and customer satisfaction in ecommerce operations.

2. How to manage returns in ecommerce?

Managing returns in ecommerce involves clear policies communicated to customers, streamlined return processes, including pre-printed labels, prompt refunds or exchanges upon receipt of returned items, and analyzing return reasons to improve product quality or descriptions. Efficient handling builds customer trust and loyalty while minimizing operational disruptions.

3. What is the standard return policy for ecommerce?

The standard return policy for ecommerce typically includes a specified timeframe (e.g., 30 days) for returns, requirements for items to be unused and in original packaging, provision of a return shipping label, and options for refunds or exchanges. Clear communication and adherence to these terms enhance customer satisfaction.

4. How do you predict product returns in e-commerce?

Predicting product returns in ecommerce involves analyzing historical data, customer behaviour patterns, and specific product characteristics. Factors like seasonal trends, customer reviews, and return reasons can provide insights. Utilizing predictive analytics models and machine learning algorithms can further refine predictions based on these variables, aiding in inventory and operational planning.