New data from ZigZag reveals that 76% of the UK’s top 100 retailers now charge for returns – demonstrating a significant shift in retail strategy as businesses grapple with rising logistics costs and returns abuse. Just 24 retailers offer completely free returns, meaning no returns fee and either free delivery or refunded delivery charges.
With data showing that global returns costs hit £656bn ($890bn) in 2024, fashion giants such as PrettyLittleThing, H&M, and Boohoo have introduced returns fees, while others, including ASOS and Next, are actively monitoring high-frequency returners and restricting order volumes for extreme cases. Many retailers now differentiate by channel – offering free returns to store but charging for postal returns – an approach adopted by H&M and Next, among others. This works well for retailers with large store estates, but online-only brands are turning to services like ClickLink and Asda ToYou to access third-party store networks for returns and delivery.
An expensive problem
This trend aligns with findings from InternetRetailing’s Returns 2025 Report, which highlights the scale of the challenge. The Advanced Supply Chain data used in the report shows returns rates can reach 25–40%, particularly in fashion, and account for 7% of gross sales. In 2024, for every £1m in online sales, returns cost retailers £100,000.
Consumer expectations add further pressure. A survey of 2,000 shoppers commissioned by Advanced Supply Chain found most expect refunds within two to three days of returning an item. A quarter consider a week excessive, while 27% say 10 days is too long, and 23% reject a two-week delay outright. Speed matters: 67% of consumers would likely spend their refund with the same retailer if they receive it within that critical two-to-three-day window.
The shift to charging for returns isn’t just about cost recovery – it’s also about capacity. InternetRetailing’s Returns 2025 Report highlights another critical issue: a lack of dedicated warehousing for returns processing. Most UK warehouses are running at 85-95% capacity, leaving little room for returned items, according to reporting by Pegasus Couriers. With returns rates in fashion running as high as 40%, retailers are struggling to find space to handle the volume efficiently. Unlike outbound fulfilment, reverse logistics is unpredictable and labour-intensive, requiring specialist handling and quality checks before items can be resold.
Balancing cost and customer experience
Since 2022, some retailers have opted to deduct a small percentage of reverse logistics costs from refunds, sparking mixed reactions. ConsumerX research shows 24% of shoppers are willing to pay for returns, while 35% admit they never considered the financial impact.
The ZigZag data suggests that returns charges are now a solid feature in the retail landscape – but their analysis also shows that sector differences are stark. Luxury retailers are the least likely to charge for returns (11%), while young fashion brands are at 80%. Mid-to-premium brands such as Selfridges, Boden, and Sweaty Betty continue to offer a strong returns experience, reflecting the expectations of their higher-spending and often older customers. In contrast, younger, high-frequency shoppers show greater tolerance for fees – enabling fast-fashion brands to implement charges without too much concern about pushback.
Despite this, some industry voices warn of the risks of failing to strike that crucial balance between protecting margins and the customer experience. Nikhita Hyett, general manager EMEA at Signifyd, said: “Recent data showing that three in four UK retailers now charge for returns highlights a growing tension between cost management and customer experience. While it’s understandable that retailers are looking to protect margins amid rising logistics costs and returns abuse, blanket return fees risk undermining brand reputation and customer loyalty.”
Signifyd’s research underscores the stakes: 76% of European consumers view return policies as a key factor when choosing where to shop, and 94% say an easy returns process is essential for a positive experience.
What all this means is that returns management is far more than just operational – it’s a brand trust issue. And brands who misjudge their market, and/or don’t treat returns as an essential part of the customer journey, risking losing out.
Looking for more in-depth insight?
InternetRetailing’s Returns 2025 Report is the definitive guide to the current returns landscape, offering unique insight into the innovative strategies retailers are employing to mitigate the impact of returns on their profitability, customer satisfaction, and the planet. Download it here.
