The growing importance of returns in 2026

 

Free returns used to be a fairly common perk offered by many e-Commerce providers. After all, consumers shopping in a brick-and-mortar store can simply not purchase a product after careful inspection; an option eradicated by the physical distance and pre-payment requirements of e-Commerce. Why not even the playing field?

 

However, that seems to be changing now. In the US, only 49% of sellers offer free returns to their customers. Many factors contribute to the shrinking popularity of free returns, including returns fraud, concerns for the climate, and the growing logistics costs.

 

Related topics

 

Tightened product returns at Boozt

 

The evolution of sustainability in e-Commerce

 

 

What is returns fraud

While the growing logistics costs and the sustainability issues are clear (more traffic costs more money and creates more emissions), returns fraud may be a less straightforward problem.

 

But a problem nevertheless. In the US alone, merchants spend $685 billion on returns, and ca. $103 billion of that is tied to fraudulent returns. What started as a few consumers misusing an overly generous returns policy turned into a trend with social media videos tutoring shoppers on fraudulent returns, and professional refunds brokering companies offering their services worldwide.

 

The types of fraud are numerous and versatile. Wardrobing, for example, is when consumers buy a product with the intention of using it for a very short time, then returning it for a full refund. Contrary to popular belief, this is not a victimless crime, as the returned product can’t be sold as new again, and the trips it took to and from the customer created a lot of administrative work for the marketplace, the seller, not to mention the harmful CO2 emissions it contributed to.

 

Bracketing is a slight variation of this. In the case of bracketing, a consumer purchases various sizes and colors of the same product, with the intention of keeping only the one they like best and returning the rest. Basically, bracketing consumers treat e-Commerce as their private fitting room, not caring about the cost to the businesses involved and the environment.

 

Using shallowfakes, on the other hand, is a more malicious type of fraud. Consumers take a picture of the arrived goods and edit it to appear damaged. These images are then sent to merchants, demanding a replacement product or a full refund.

 

Finally, the empty box scam is also making its rounds in e-Commerce. Instead of the actual product, consumers send back another, less valuable item, or product parts, or even - as the name suggests - an empty box. In large-scale e-Commerce operations dealing with a multitude of packages every day, it can be particularly challenging to pair the returning box with the original order to ensure that the consumer indeed returned what they were supposed to. This lowers the risk of being caught for the fraudster.

 

 

The future of returns policies

While environmental sustainability and merchants’ budgetary issues would make it best to scrap returns altogether, consumer rights demand that at least some option would stay open for consumers to return an unwanted item and receive compensation.

 

In the age of personalized marketing and customer loyalty programs, a personalized returns policy doesn’t seem far-fetched at all. In fact, the trends seem to point towards it.

 

An increasing number of merchants offer personalized returns based on a customer’s loyalty, returns history, and total lifetime value. In case of loyal customers who haven’t abused the brand’s returns policy so far, a more generous returns offer may be extended, whereas serial returners may face fees and higher costs.

 

Similarly, top customers may enjoy premium returns policies, including instant refunds, a longer returns window, and a shorter admin procedure.

 

Technology, especially automation as well as AI-assisted applications, can help brands and sellers to handle returns more efficiently. This includes a more automated returns process, dynamic stock volume prediction,s and easier flagging down of potential cases of fraud.

 

Let’s take a look at a personalized returns policy already in effect!

 

 

Personalized returns at ASOS

A UK-based online fashion marketplace, ASOS, introduced a returns fee for serial returners in 2024. After the initial uproar, the policy seems to be working quite well today.

 

 

What is ASOS

Founded in 2000, British online fashion retailer ASOS originally sold clothes inspired by celebrity outfits. Hence the abbreviation: As Seen On Screen. Today, ASOS sells a wide variety of fashion and beauty items as well as accessories in the UK, Europe, and the US. With 17 million active buyers and £2.5 billion GMV (around 2.8 billion euros), ASOS is one of the most popular fashion marketplaces in the UK.  

 

 

Screenshot of asos.com depicting ASOS’ homepage

 

 

The returns transparency tool

The returns fee introduced in 2024 caused an uproar because not all customers seemed to have encountered it. In fact, only shoppers with a high returns rate were slapped with a fee of £3.95 in case they returned products worth over the value of £40. However, it was not specified what returns quantities and frequencies a high return rate meant.

 

This is why the company introduced the returns transparency tool. As of January 2026, customers can see their individual return rate in ASOS’s shopping app and what it means for them in terms of return fees.

 

Customers with a return rate below 70% can return chosen products for free. Those with a rate between 70% and 80% have to pay £3.95 for returns, while those over 80% also face an additional £3.95 ‘restocking fee’.

 

The app helps customers anticipate what kind of fees they’ll encounter, and holds a mirror to their return activities. Should a consumer approach a threshold, the app will issue a warning.

 

 

Returns rules in the EU

In the EU, consumers are entitled to cancel or return a purchase within 14 days. This is called a cooling-off period, and it applies to most purchases. A few exceptions include tailor-made services personalized for the consumer in question, plane and concert tickets, food delivery services, and sealed products that the consumer has unsealed during this period.

 

Retailers are required to refund the purchase price within 14 days of receiving the request, including the original shipping costs. However, the law does not require retailers to offer free returns, which means that consumers must bear the cost of returning the product themselves. Nevertheless, some companies offer free returns in order to improve their service.

 

 

Risks and opportunities for brands

The evolving returns policies provide brands with various opportunities and risks.

 

 

Opportunities

AI-powered returns handling, as well as itemized returns databases like the one ASOS provides, assist brands with faster and more certain fraud detection. Such visibility deters serial returners and gives you all the necessary data to recognize a fraudulent return.

 

This data-driven defense reveals which products are most vulnerable to returns fraud, allowing you to take the necessary countermeasures, including setting up a thorough online monitoring service and ordering test purchases.

 

You can also utilize this data to shape your loyalty programs and reward the shopping habits of your best customers. For example, you can offer premium returns options for your most loyal customers.

 

 

Risks

Returns fraud in itself is quite risky for brands, subjecting you to serious financial and reputational losses. The empty box scam is particularly dangerous for the resale of counterfeits. Should fake or lookalike products arrive at logistics centers instead of genuine product returns, it’s entirely possible that these products will get mislabelled as your original products and resold at the first opportunity - to the detriment of your reputation.

 

Data breaches are always a risk where large amounts of data are collected and stored. Returns data is no exception here, which is why proper storing and handling are crucial to evade devastating data breaches.

 

Many serial returners may not give up their lucrative practice without a fight. You have to be cautious to catch their workarounds, like creating new accounts or switching to a different sales channel.

 

 

Conclusion

Returns are an integral part of e-Commerce. Your returns policy should keep your brand safe from returns fraud, while still allowing honest customers to change their minds about a purchase.

 

Contact us if you have any concerns about returns, fraud, or any issue threatening your brand’s IP rights!