Should You Charge for Return Shipping? The Real Impact on Post-Holiday Chaos
- Danyul Gleeson
- Sep 17
- 5 min read
Peak season isn’t just a sales cycle - it's a full-blown amusement park ride designed by caffeine-fueled accountants.
November is the slow climb up the tracks as carts fill and forecasts soar. December is the screaming freefall - stockouts blinking, scanners beeping like strobe lights, and warehouses buzzing at rave-level intensity. And January? That’s when the ride doesn’t end with applause - it crashes into a nosedive of regret, cardboard, and a tidal wave of returns.
Because what leaves your dock in December often comes boomeranging back in January. The bracketers - shoppers who order five sizes and keep one. The serial returners, who treat free returns like a gym membership: constant, repetitive, and guilt-free. The “oops” shoppers who panic-bought three colours of the same air fryer at 2am and now want their money back. Add in the trend-chasers (last week’s viral gadget suddenly feels like yesterday’s trash), and your warehouse floor starts to look less like a distribution hub and more like a returns refugee camp.
And here’s the plot twist: retailers are starting to say no more. By 2024–2025, 40–65% of retailers were charging for at least some returns (Retail Dive, NRF). The impact? Return rates fell by around 20% on average, especially in fashion and general merchandise where bracketing was rampant. But - and it’s a big but - the story doesn’t end there.
Because while paid returns curb chaos, they also reshape customer behaviour, loyalty, and long-term sales in ways that demand careful strategy. Done right, fees protect your margins. Done badly, they can torch your future basket sizes.
1. Reduced Return Volumes - When Fees Scare Off the Casuals
Introducing return shipping fees works like a velvet rope at the nightclub: it doesn’t stop the people who really want in, but it sure cuts down on the “just browsing” crowd.
Retailers that added return shipping or restocking fees saw return rates drop from ~21% to ~17% (McKinsey, Appriss).
Shoppers got more intentional - fewer “safety net” purchases, fewer just-in-case duplicate orders.
Post-holiday operations became more predictable, which is no small win when reverse logistics costs can average $25–$33 per return (NRF).
One apparel exec called it “the end of five-size roulette” - customers stopped treating wardrobes like try-on TikToks and started clicking with more care.
2. The Loyalty Trade-Off - Fees Can Feel Like a Buzzkill
Here’s the rub: charging for returns isn’t all champagne and savings.
Some shoppers (especially in apparel and electronics) said “no thanks” when they spotted return fees upfront. That translates into lower purchase intent and potential customer churn.
Price-sensitive segments are hit hardest. For premium brands, customers are less fazed; for mid-market, it risks abandoned carts.
A Narvar survey found 37% of shoppers said paid returns would make them less likely to shop with a brand again.
The balancing act? Use fees as friction for refunds, but offset them with perks:
Free returns for exchanges or store credit.
Loyalty members get free returns as a perk.
Clearer sizing guides, product info, and live chat to head off unnecessary returns.
Think of it as sugar-coating the pill - customers will swallow fees if they feel they’re still getting value.
3. Industry Trends - From Free-For-All to Fee-For-Some
The era of blanket free returns is ending. Why? Because it was bleeding margins dry.
By 2024, over 50% of U.S. fashion retailers charged return fees in some form (Coresight Research).
Big-box players like Zara and H&M started charging modest shipping fees, while still offering free in-store returns to soften the blow.
Amazon tested hybrid models - free for Prime, but with conditions tightening.
Meanwhile, free in-store returns remain the safety valve: cost-effective for retailers, convenient for shoppers, and a chance to drive more foot traffic.
It’s less “one size fits all” and more “choose your battlefield.”
4. Quantified Impact - By the Numbers
Let’s break it down with hard figures:
20% average reduction in post-holiday returns after return shipping fees were introduced (Appriss + case studies, 2022–24).
Ecommerce returns dropped from 21% to ~17% in categories like apparel, footwear, and accessories when fees were applied.
Reverse logistics savings = millions in avoided processing, labour, and transport.
But: ~30–40% of customers said their likelihood to repurchase dipped when faced with blanket return charges.
Bottom line: fees reduce chaos, but you need levers (exchanges, credits, member perks) to avoid damaging the long game.
5. The Smart Play - Fees as One Tool, Not the Whole Toolbox
Return shipping fees alone are blunt instruments. Use them with nuance:
Apply fees to refunds only; keep exchanges/credits free.
Offer free returns to loyalty tiers or high-value customers.
Keep in-store returns free - they’re cheaper and generate upsell chances.
Pair with better product detail pages: improved size guides cut apparel returns by 20–30% (Fit Analytics, Shopify+).
It’s not about punishing customers; it’s about retraining habits while still showing value.
FAQs: Should You Charge for Return Shipping?
Does charging return shipping really reduce post-holiday return volumes?
Yes. Retailers that introduced return shipping fees saw average return rates drop by about 20%, particularly in fashion and general merchandise categories where “bracketing” (ordering multiple sizes or colours and sending most back) was rampant (NRF / Retail Dive). Customers became more selective and intentional in purchases, leading to fewer “just-in-case” orders.
How much do returns cost retailers without fees?
Returns aren’t just cardboard clutter - they’re costly. The average return costs $25–$33 per order once you add transport, labour, inspection, and repackaging (Appriss/NRF). In 2023 alone, U.S. retailers lost $743 billion in returned goods, equal to 14.5% of retail sales. Charging for return shipping helps claw back some of those costs.
Do return shipping fees hurt customer loyalty?
They can, if used bluntly. A Narvar survey found 37% of shoppers say paid returns would make them less likely to shop again. Price-sensitive customers are the most affected. But retailers who balance fees with perks - free exchanges, loyalty-member perks, or free in-store returns - minimise churn while still reducing return volumes.
What alternatives soften the blow of paid returns?
Smart retailers combine fees with incentives to keep customers on side:
Free returns for exchanges or store credit
Free in-store returns (cheaper for retailers, convenient for shoppers)
Loyalty perks, like waived fees for members
Better product info, such as detailed sizing guides, photos, and reviews, which cut apparel returns by 20–30% (Fit Analytics).
What’s the long-term industry trend on return shipping fees?
The free-return era is fading. In 2024–2025, 40–65% of retailers charged for at least some returns (Retail Dive). Big names like Zara and H&M introduced modest return shipping fees while still offering free in-store returns. The trend is clear: blanket free returns are shrinking, replaced by hybrid models that balance cost control with customer expectations.
Exit Scan: Charging for Returns Without Charging Away Loyalty
Return shipping fees are like putting up speed bumps. They slow down reckless behaviour, cut down post-holiday chaos, and protect your margins. But slam them down everywhere, and you risk annoying your best drivers.
The winning approach? Charge smart, not hard. Use fees to deter casual returns, but combine them with exchanges, credits, loyalty perks, and better product info to keep customers on your side. Do that, and you’ll reclaim January from chaos without sacrificing February’s customers.
At Transport Works, we design flows that don’t just manage returns - they monetise them. Because Always Delivering means thinking just as hard about what comes back as what goes out.
Insights from Danyul Gleeson, Founder & Chaos Tamer-in-Chief at Transport Works
Danyul has been in the trenches - warehouses where pick paths were sketched on pizza boxes and boardrooms where the “supply chain strategy” was a shrug. He built Transport Works to flip that script: a 4PL that turns broken systems into competitive advantage. His mission? Always Delivering - without the chaos.
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