3 ways fashion retailers can minimise returns policy abuse

Written by Jonathan Poma, CEO, Loop Returns

Whether it’s mailing an empty box or wearing an outfit to a wedding before returning it, returns policy abuse and other unfavourable activities pose financial challenges for fashion retailers. Here’s how to curtail misuse without alienating your loyal customers…

1: Set out an explicit returns policy (and add repercussions if necessary)

In a recent survey conducted by retail-tech returns management platform Loop Returns, 91 per cent of online shoppers either always (33 per cent) or sometimes (58 per cent) review a returns policy before making a purchase. This means outlining what is and what isn’t allowed in your policy can help minimise policy abuse behaviours. Prominently displaying your return policies and practices on your website can set clear expectations and guide customers toward more responsible interactions.

Additionally, a third of online shoppers say if they had to pay a fee to make a return, they would be less likely to engage in these behaviours. So, consider offering free returns to loyalty program members only. Paying a return fee may help dissuade more casual fraudsters from misusing return policies.

2: Analyse patterns and identify repeat offenders

To effectively tackle returns abuse, evaluate prior customer behaviour and check for patterns of returns. If a shopper is recognised as engaging in return fraud, implement a system that means they will be unable to complete the process automatically in future and will need to communicate with the team first to ensure they can’t exploit the system.

Further, when a customer makes a return, ask for feedback and analyse data-driven patterns to identify product issues. This information enables you to make necessary adjustments to product descriptions. With more accurate product information online, you can discourage the more harmless types of bad return behaviour.  

3: Emphasise the impact on your business and the environment

Among UK consumers who have never engaged in return policy abuse, 67 per cent say they have never done so because they felt guilt over potential ethical or moral concerns, 14 per cent cite fear of legal consequences, and 13 per cent worry about the impact on the business/retail industry. Additionally, over half of online shoppers (54 per cent) consider the potential environmental consequences either strongly or somewhat when deciding whether to make a return.

You can leverage this insight by educating customers on the impact returns have on your business and the environment. By emphasising your brand values, the environmental consequences, and ethical considerations associated with returns, you can encourage more responsible shopping behaviour and foster a sense of accountability among customers.