The problem with product returns and how to avoid them

Building a digital shelf that reduces product returns starts with the confidence of knowing your products will be found at every touchpoint.

As online sales boom, there’s a lingering worrisome side effect – product returns. And they are as annoying for shoppers as they are for brands. For instance, a 2024 Consumer Returns in the Retail Industry report highlights that 84% of shoppers prefer box-free, label-free returns with instant refunds, underscoring the demand for hassle-free return processes. Additionally, 46% of consumers have abandoned purchases due to inconvenient return methods, indicating that a cumbersome return process can deter potential sales. That means a streamlined returns management process is critical to keep customers. In addition, examining shopper satisfaction and using product returns analysis to uncover potential challenges is key for brands to thrive in an increasingly competitive environment.

That’s why Inriver recently hired OnePoll to conduct an independent study of 6,000 shoppers from the U.S., the U.K., and Germany to share their online buying experiences. One key takeaway from the results? Consumers demand accurate product information. When they don’t get it, they describe the buying experience using words like “annoyed,” “confused,” and even “distrustful”.

The growing product returns problem

In 2023, U.S. retailers faced an estimated $743 billion in merchandise returns, accounting for 14.5% of total retail sales. This marks a slight decrease from the previous year’s return rate of 16.5%, yet returns continue to pose significant challenges for the industry. ​

Notably, online purchases exhibit a higher return rate, with 17.6% of online sales being returned, compared to 10.02% for brick-and-mortar purchases. This disparity underscores the complexities associated with e-commerce transactions, where customers often rely solely on product descriptions and images to make purchasing decisions. ​

The financial impact of these returns is substantial. For every $1 billion in sales, the average retailer incurs approximately $145 million in merchandise returns. These costs encompass shipping, handling, restocking, and potential loss of merchandise value. ​

To mitigate these challenges, retailers are increasingly focusing on enhancing product information accuracy, utilizing advanced analytics to predict return patterns, and streamlining the returns process to improve customer satisfaction while reducing associated costs.

Why products get returned

Sometimes, products are returned because the merchant shipped the wrong item. Sometimes, there are accidents during shipment, and the product is damaged or defective. In other cases, the item arrives too late, or the customer buys multiple items to compare them, then returns the product they don’t want. Most commonly, though, the buyer feels differently about an item once they see it or try it on in person. 

According to our data, 34% of shoppers cited poor product descriptions as the main reason they sent something back, followed by 21% who blamed a poorly fitting item. Interestingly, 11% of global shoppers intentionally purchase several options so they can return the things they don’t want. At the same time, 10% say they never return online purchases.

Why product returns are bad for business

Let’s take a closer look at why product returns can be problematic for your brand:

• Loss of revenue: Processing returns is a significant expense for retailers. On average, each return costs between $25 and $30, factoring in shipping, customer support, product handling, and restocking. These costs can accumulate rapidly, especially with high return volumes. ​
• Loss of confidence: You can increase customer confidence by streamlining your returns management process. According to a product return rate analysis from Klarna, over eight in ten online shoppers would reject a retailer after a bad return experience. Unfortunately, returns can also negatively impact customer loyalty. In another report by Incisiv, 95% of shoppers say a poor returns experience will make them less likely to shop from a brand again.
• Sustainability issues: There is an environmental cost to returns. Aside from a loss of revenue, throwing out products can damage a brand’s sustainability reputation. Most returned items can’t be resold at full price, and some aren’t resold at all. That means, in many cases, they end up in a landfill.
• Likelihood of bad reviews: Negative return experiences can lead to unfavorable reviews. Research shows that 94% of consumers have been influenced by a negative review when deciding to avoid a business.

How brands can avoid returns

Ensure product information is up to date

When shopping online, consumers rely entirely on product detail pages to make confident decisions. But when that content is incomplete or inconsistent across different channels, it creates confusion—and ultimately, higher return rates.

In fact, studies show that 40% of products have missing or inaccurate product information, and 34% of shoppers cite poor product descriptions as the top reason for returning an item. Even small gaps—like unclear sizing, missing compatibility notes, or differences between product listings—can erode trust and trigger returns.
To reduce friction, establish a centralized system for managing product information and ensure that content is consistently published and maintained across every sales channel. That way, shoppers always know what they’re getting—no surprises, no disappointments.

Leverage visuals and AR

One of the most common reasons for returns is that the product didn’t look, feel, or function as the customer expected.

While strong copy is essential, visual context plays an even bigger role in reducing uncertainty. High-quality product photos, videos, 360-degree views, and augmented reality (AR) tools help shoppers better understand what they’re buying. That extra detail can make the difference between a confident purchase and a hasty return.
For example, virtual try-ons for fashion, lifestyle shots for furniture, or interactive product demos can bring the product experience to life. The more clearly a shopper can visualize the item in their context, the less likely they are to send it back.

Leverage digital shelf analytics

Not all product returns are avoidable—but many are predictable.

By monitoring digital shelf performance, brands can identify high-risk SKUs before return rates spike. Metrics like content completeness, pricing accuracy, visibility across sales channels, and product search rankings offer early warning signs that something might be off.

This kind of insight makes it easier to fine-tune content, address gaps, and test variations based on real-world behavior—not assumptions. Think of it like creating a “returns risk profile” across your catalog, allowing your team to prioritize updates where they’ll have the biggest impact.

How to build a digital shelf that reduces product returns

Building a digital shelf that reduces product returns starts with the confidence of knowing your products will be found at every touchpoint. With Inriver’s PIM solution, you can see what competitors are doing and what customers want. We help deliver accurate data with our product syndication capabilities and create an immersive buying experience using image recognition to generate product attributes automatically.

It’s easy to transform product data into engaging stories by enriching your product information with meaningful images, videos, and other media. Our technology also allows you to extract real-time performance data and respond as needed. That way, you can uncover potential threats to your business and turn them into opportunities.

How to streamline your returns management process

Collect and analyze returns data

By collecting and analyzing returns data, you can better understand which items are being returned and why. Knowing where returns originate is crucial to allocating enough resources across different channels. That way, you can identify underlying trends to address them and reduce return expenses.

Implement simple return policies

Customers want a simple and streamlined returns process. Some suggestions include having a clear return policy on your website so customers understand what steps they need to take and by when. To minimize customer service questions, you can also offer an estimated timeframe for a refund, exchange, or credit.

Automate the returns management process

Managing returns can be costly and cumbersome. Automating the process helps to reduce inaccuracies and costs. In addition, it enables you to turn a liability into a growth opportunity by giving customers control over the return experience, optimizing reverse logistics, and ultimately increasing customer satisfaction.