The Return Trap: Fixing Retail’s Most Expensive Mistake

When ASOS banned shoppers over return policy abuse, it sparked debate. But the real lesson lies deeper: how can retailers reduce return rates without damaging customer trust?

When fashion retailer ASOS made headlines for banning customers it deemed to be abusing its returns policy, the debate was immediate. 

Some shoppers vented their frustration online, while others defended the decision as a necessary response to growing operational pressures. 

While ASOS clarified that only a small group of customers had been affected for breaching its fair use policy, the incident raised a broader issue impacting the whole industry – how can retailers manage the rising cost of returns while still delivering a high-quality customer experience?

The Returns Increase

Returns are a long-standing challenge in fashion retail. With online shopping, especially in clothing, it’s not unusual for return rates to reach 30% or more. Many shoppers, particularly those buying from online-only stores, rely heavily on flexible returns policies as a critical part of their purchasing decision. 

The inability to physically try on items increases uncertainty, so a flexible and customer-friendly return process becomes a key driver of conversion and loyalty. Brands that restrict returns too harshly risk alienating their core audience, which can have lasting damage on brand perception and sales.

However, whilst the logistical and financial costs of returns are high, they often reflect shortcomings in the pre- and post-purchase experience, not just customer behaviour.

The Power of Post-Purchase Experience 

In most cases, retailers who invest in improving their pre-purchase strategy can reduce returns before the product even leaves the warehouse. For example, detailed product descriptions, accurate sizing guides, and clear photography can help manage expectations. 

Customers often return items not out of dissatisfaction with the brand, but because the product wasn’t what they imagined, and these mismatches are avoidable with better information upfront.

However, the current situation underlines an important truth that the journey doesn’t end once a customer clicks “buy.” In fact, what happens after the transaction can be just as crucial in determining customer satisfaction, loyalty, and return behaviour.

Thoughtful communication, real-time delivery updates, and branded tracking experiences reassure customers and enhance their confidence in the brand. Likewise, the follow-up period after delivery is often overlooked. Personalised messages offering tips on styling, care instructions, or asking for feedback can make a big impact.

These interactions help reinforce the value of the purchase and reduce the temptation to return. Crucially, with the right systems in place, these touchpoints can be delivered automatically and at scale.

Automation and Technology as A Returns Strategy

Technology is increasingly used to reduce returns even before purchase. Virtual try-on tools, sizing recommendation engines, reviews, and augmented reality help customers visualise fit and style, lowering the chances of disappointment and unnecessary returns.

In addition, automation is becoming essential for effective returns management. Retailers are leveraging it to streamline the returns process, reduce return rates, and improve communication with customers at every stage.

Automated order tracking is a key example. Rather than generic dispatch emails, proactive updates guide customers from dispatch to delivery, reducing confusion and cutting down on return-related enquiries, boosting both efficiency and customer satisfaction.

Automation can also help brands use customer data to better understand return patterns. By identifying high-return items or common issues, such as size problems or material concerns, retailers can update product descriptions and set clearer expectations, helping to prevent returns before they happen.

AI-powered tools, such as virtual assistants and chatbots, now handle many return-related questions. Whether customers need help initiating a return, tracking a refund, or resolving sizing issues, these systems deliver quick, consistent support, freeing up staff to manage more complex cases.

This end-to-end use of automation, from informed purchasing to smooth returns, enables retailers to lower return rates while building stronger, more confident customer relationships.

Creating a Fair, Customer-Centric Returns Ecosystem

While some customers may abuse liberal return policies, most act in good faith. It’s essential for brands to create fair return policies that work for everyone, balancing customer trust with operational costs. 

Clear warnings and transparent communication are far more effective in creating a fair, customer centric returns ecosystem.

For example, sudden or unclear enforcement of return restrictions can confuse customers and damage trust, especially when customer support is unable to assist effectively. Retailers should empower their customer support teams to provide transparent, specific reasons when banning accounts or restricting returns, rather than using impersonal, automated messages. This human touch can reduce backlash and preserve trust by showing customers they are being treated fairly and respectfully.

Some retailers can use returns to build loyalty, by offering exchanges, store credit, or virtual consultations to turn returns into retention opportunities.

Overall, reducing returns is about empowering customers. When shoppers feel informed and supported, they’re more likely to keep their purchases. The most effective returns strategy is a fair, transparent, and customer-focused experience from start to finish.

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