Peak Bulletin 2024 – Issue 5

Peak Returns: Why Effective Returns Management is Crucial for Retailers

The festive season isn’t just a Peak time for sales—it’s also when returns hit their highest.

In the UK, online returns are forecast to reach £27.3 billion this year, with serial returners — 11% of shoppers — responsible for 24% of all returns, according to Retail Economics and ZigZag.

For retailers, this creates an operational challenge: managing the surge in returns while protecting profitability and customer satisfaction.

To address this, retailers are employing a range of strategies aimed at balancing costs and consumer expectations:

• Return Fees to deter excessive returns – Retailers like ASOS (£3.95) and H&M (£1.99) have introduced return fees to discourage frequent returns. While not universally popular, over half of serial returners are willing to pay a small fee for returns, suggesting a targeted approach could be effective.
• Loyalty Perks – PrettyLittleThing offers free returns for loyalty customers, rewarding their most valuable shoppers while managing return costs.
• Tech-Driven Prevention – Virtual try-ons and AR fitting rooms are helping retailers address the root causes of returns—poor fit and unmet expectations. These tools are particularly valuable during the gifting season, where size and style mismatches are common.
• Sustainability Initiatives – IKEA’s Buy-Back and Resell programme encourages customers to return unwanted items for vouchers, promoting a circular economy. This not only reduces waste but also raises awareness about the environmental impact of returns while promoting in-store and refurbishment options.

By aligning policies with shopper behaviours and leveraging technology, retailers can turn the festive returns challenge into an opportunity. Effective returns management not only protects margins but also fosters long-term customer loyalty, making it a critical component of a successful Peak season.