Retailers vs. returns: is cracking down costing brands more than it’s saving?

Asos became wrapped up in another controversy in late June after the online giant, which shipped 67.2 million orders last year, confirmed it had closed the accounts of “a small number” of customers for returning more clothes than they kept. According to the retailer, this is in breach of its Fair Use policy and its move was necessary “to keep free returns for everyone else”. 

The shoppers affected by this blanket ban told a different story. They said sizing swung wild, forcing them to buy three of everything and send two back. Some had even paid for ‘Premier’ delivery since 2018, only to find that now they are locked out with no appeal. 

This is not a first offence in fashion’s new war on returns; PrettyLittleThing added a £1.99 fee and deactivated high‑return accounts just last year. Despite its clear popularity with customers, could we be watching the sun set on the free-returns era? 

In 2024 alone, serial returners in the UK accounted for £6.6bn in returned items, according to figures from ZigZag. Al Gerrie, chief executive of the global returns service group, described the scale of the issue bluntly: “Serial and slow returners make up 22% of shoppers yet are responsible for nearly half of all returns.”

This growing behaviour is fuelled by a perfect storm of convenience, cost-of-living pressures and increasingly lenient retail systems. New data from fraud software Forter shows that 52% of UK consumers have knowingly abused return policies in the last 12 months. Among them, 31% admitted to ordering expensive items they couldn’t afford, wearing them, then returning.

For retailers whose brands are built on free delivery and easy refunds, the business case for reform is no longer optional because returns aren’t just expensive, they waste time and could toy with retailers’ reputations.

“Policy abuse is costing retailers billions of pounds,” says Doriel Abrahams, principal technologist at Forter. “A one-size-fits-all approach to any policy – whether it’s returns, promotions or loyalty programmes – will leave today’s retailers exposed. Instead, by knowing who they’re doing business with, retailers can strike the crucial balance between customer-friendly policies and protection against serial abuse.”

Retailers are at a crossroads. With tightening margins and rising fulfilment costs, they must choose between acting decisively or continuing to subsidise unsustainable customer behaviours. Reverse logistics poses a significant threat to the profitability and sustainability of online retailers, especially those with high sales volumes; it’s more than just a nuisance.

Craig Smith, UK country manager at enterprise ecommerce platform Scayle, explains, “Frequent returns open retailers up to immense costs and threaten to damage their green credentials. Returned items are often deemed unsellable, meaning they end up in landfill. Or, if the retailer plans to resell the product, they’ll be faced with the ‘refurbishment tax’: the cost of refurbishing a product to a re-sellable state, which can be up to 20% of the item’s original price.”

However, Smith cautions that charging for returns comes with risks. “Asos and others should be wary of applying a blanket returns fee to all customers – this could really alienate loyal customers that hardly ever make a return,” he adds. “Asos has the right idea by only charging for excessive returns, targeting ‘repeat return offenders’. This way, customers that genuinely need to return an item – either on account of poor sizing, late delivery, or an item that looks different to the website – aren’t being penalised.”

For retailers whose brands are built on free delivery and easy refunds, the business case for reform is no longer optional because returns aren’t just expensive, they waste time and could toy with retailers’ reputations.

Asos isn’t alone in cracking down. New data shows that returns abuse is not only widespread – it’s evolving. According to the 2024 report by Forter, 21% of respondents treat bulk ordering as an unauthorised “try before you buy” service. The lines between convenience, habit and abuse are blurring – and for retailers, that distinction matters.

The numbers underscore the stakes. But while there is a real financial burden, Gerrie also sees the opportunity. “Discouraging over-ordering is a financial necessity, but even serial returners can be profitable,” he explains. “Keep rates, sustainability and the speed of returns should all factor into these decisions, but you’re stabbing in the dark without robust data.” 

Asos may be within its rights to shut down serial returners, but the law doesn’t give it carte blanche.

Retailers face a balancing act. While generous return policies foster loyalty—with 50% of UK shoppers citing free returns as a reason to stay with a brand, according to SAP Emarsys—they also contend with 43% of consumers admitting to over-ordering with the intent to return excess items.

When policy clashes with public perception, the risks are not just financial but reputational. The immediate challenge is to distinguish between loyal customers and opportunists without alienating either.

Asos may be within its rights to shut down serial returners, but the law doesn’t give it carte blanche. Andy Brian, partner at law firm Gordons and an expert in consumer law, believes the company must tread carefully. “From a legal perspective, while Asos is perfectly entitled to protect its business from the adverse commercial impact of excessive returns, it must do so within the framework of consumer protection law,” he says.

Under current UK rules, online shoppers are granted a 14-day cooling-off period for most purchases, a statutory right that can’t be removed by a retailer’s own terms. “Retailers are permitted to set reasonable terms and conditions, including charging for return delivery, provided these do not infringe upon statutory rights,” Brian explains: “Asos’ fair use policy, which seeks to address patterns of excessive returns, must therefore be carefully constructed.”

He adds that the enforcement must be consistent and grounded in objective criteria, saying, “It is essential that the policy is clearly articulated, transparently communicated, and enforced in a manner that is both consistent and proportionate. Customers must not be deprived of their statutory rights to return goods.”

Ethically, the picture is no clearer. Policies that appear punitive or arbitrary, even if legal, carry the risk of backlash. Brian also points to cultural differences. “UK consumers have traditionally demonstrated higher rates of online returns, often viewing generous return policies as a standard feature of ecommerce. In contrast, some European markets tend to see a more conservative approach, with consumers less inclined to make frequent returns, and a greater emphasis on sustainability and responsible consumption.”

Claire Wallis, consumer goods and retail director at management consultancy BearingPoint, agrees that sizing sits at the heart of the issue and that retailers may be tackling the symptom, not the cause.

For retailers operating across multiple territories, that means one policy won’t suit all. In the UK, where liberal return habits are the norm, clamping down too hard risks alienating loyal shoppers. In other regions, stricter controls may be more readily accepted. As ever, context matters.

Chief executive of returns platform ZigZag, Al Gerrie, believes the answer lies in nuance, not knee-jerk reactions. “There is no one-size-fits-all solution and outright bans come across badly when other efforts could be made to reduce returns volumes,” he says. “Sizing, particularly in women’s fashion, is a recurring issue. Retailers need to monitor common reasons for returns and make sure their websites and policies match accordingly. Consumers can be helped in making informed purchase decisions with up-to-date size guides, model size information, and video content to show a truer fit to clothing.”

Claire Wallis, consumer goods and retail director at management consultancy BearingPoint, agrees that sizing sits at the heart of the issue and that retailers may be tackling the symptom, not the cause. “Much of the behaviour they’re trying to curb – ordering multiple sizes, frequent returns – isn’t abuse, but a symptom of fit uncertainty,” she explains. “What’s missing here is smarter use of customer data. Platforms like Zara and Nike have started using purchase and return history to guide sizing recommendations, reducing the need for ‘bracketing’ in the first place. Asos could do more with this: if a customer consistently keeps size 10 and returns size 12, the system should learn and adapt. Instead of blocking accounts, they could guide shoppers more intelligently.”

She also highlights the broader implications of poor sizing, particularly for underserved demographics. “Fit-related issues still account for 50–70% of fashion returns,” she adds. “Sizing varies not just across brands, but within ranges, making consistent fit elusive – especially for plus, petite, or in-between customers. Without solving for size accuracy and better fit tools, the returns issue is unlikely to go away.”

Gerrie argues that with better data, even serial returners don’t need to be cast aside, adding, “Retailers need to find a balance between customer-centricity and discouraging excessive returns, and data visibility is a large part of this equation. Even serial returners can be profitable.”

And while policy might be part of the fix, so is presentation. Lesley Taylor, senior lecturer at Southampton Solent University and head of the university’s Re:So retail initiative, believes that brands could be doing more to educate. “Fast fashion brands, especially those that are online only, have to expect a high rate of returns partially due to their business model. Their lower priced clothing is easily accessible and delivered quickly, making it appealing to the consumer – especially the younger consumer,” she says. “Should the retailer start to take some responsibility in the way it markets itself to the customer and educate them on what happens to the returns?”

Nikhita Hyett, general manager EMEA at commerce protection firm Signifyd, says heavy-handed enforcement risks creating more problems than it solves.

Asos’s decision to block accounts over returns has sparked a backlash, highlighting issues of trust and transparency, and shifting the balance of power between retailer and customer.

But Nikhita Hyett, general manager EMEA at commerce protection firm Signifyd, says heavy-handed enforcement risks creating more problems than it solves. “Penalising customers for high return rates can harm brand reputation and customer loyalty. Instead, retailers need a more nuanced, data-driven approach. Machine learning and AI can help differentiate between genuine returns and fraudulent activity, ensuring that good customers are not unfairly targeted.”

Meanwhile, Amal Ahmed, director of financial services and EMEA marketing at Signifyd, echoes the warning. “Asos’s experience serves as a reminder of the potential reputational costs of inadequate return management. Retailers must balance operational efficiency with customer satisfaction to maintain trust and long-term growth.”

The industry now faces a critical juncture. One path leads towards stronger customer loyalty, improved retention, and long-term value supported by better use of data, more transparent communication, and policies that reflect the complexity of modern shopping behaviour. The other path risks prioritising short-term cost reductions at the expense of customer trust and brand reputation.

As Andy Brian from Gordons advised, “Any action taken by Asos to close accounts or restrict access must be based on clear, objective criteria and must not be discriminatory or arbitrary.” 

The key takeaway is not that retailers should seek to punish returns, but that they must strive to understand them. That means investing in meaningful data, using technology to differentiate between customers, and ensuring that policies are designed to build trust rather than erode it. Ultimately, it means recognising that customers are not simply sources of risk, but long-term partners in the success of the business.