UK retailers could be putting £34.1bn in annual online sales at risk as stricter returns policies deter shoppers, according to new research from logistics technology company Locus.
The warning comes as fashion retailers tighten returns rules to offset rising costs. But the data suggests the move could backfire by reducing spending and weakening loyalty.
ONS figures show UK spending on textiles, clothing and footwear reached about £57.8bn over the past year. Locus estimates more than half of that could be at risk if consumers cut purchases in response to tougher policies.
Tighter policies reduce loyalty
Locus surveyed 2,000 UK shoppers and found that nearly six in 10 (59%) say they would be less likely to buy if return fees or tighter policies were introduced, while 56% would switch to another retailer. Only 38% say they would keep more items rather than return them. Meanwhile, one in five (20%) expect or plan to return most of what they buy online.
The findings come as brands such as ASOS face criticism over changes that could see frequent returners charged £9.90 for next-day delivery.
A complex challenge for retailers
Subhro Chakraborty, CRO at Locus, says: “Returns have become one of the most complex challenges facing retailers today. While there is understandable pressure to reduce return-related costs, our research indicates that overly restrictive policies risk creating friction at a crucial point in the customer journey.”
He adds: “Retailers need to balance operational efficiency with customer expectations, or they may inadvertently drive shoppers elsewhere.”
Chakraborty argues retailers should focus on reducing returns before they happen. “Rather than relying solely on stricter returns policies, retailers may find greater success through investments in technologies and operational improvements that reduce unnecessary returns before they occur,” he says.
“The goal should be to improve purchase confidence, not undermine it.”
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