It’s that time of the year again, and now that the biggest weekend for holiday shopping has concluded, it’s time to start preparing for one of the biggest side effects of the gift- giving season.
The average eCommerce return rate ranges between 20-30% and is even higher during the holiday shopping season. Customers continue to expect a seamless returns process year after year. According to data from the National Retail Federation (NRF), the return rate in January 2025 was 17% higher than the previous holiday season, reaching over $890 billion in returns. However, due to retailers' increased efforts to reduce returns, the return rate for 2026 is expected to decline, but still stay consistent during the holiday season.
Consumers appreciate a flexible and painless returns experience, but for retailers, it can be a challenge to create a returns process that benefits customers but doesn’t require significant additional resources or energy from their team.
How to Prevent Returns
Clearly Outline Return Policy
It may seem counterintuitive, but the first line of defense against returns is actually creating a transparent return policy. More than 66% of consumers read a return policy before making a purchase, and customers are also more likely to remain loyal to a brand with a positive customer experience.
Clearly write your return policy and make it easily accessible on your site. Don’t bury it in a footer – highlight that customers can return a product if it doesn’t work out for them, and include a link to it in the shopping cart. This transparency around returns minimizes surprises and can help improve conversions and reduce returns.
Product Reviews and Q&A
Retailers should consider customer reviews a cornerstone of their marketing strategy, as they can help customers make more informed decisions about their purchases. Incorporating user-generated content like reviews with user-uploaded images and product Q&A on your site provides valuable social proof that can improve conversion rates. Product reviews highlight certain features of a product or service that customers are excited about or indicate something that might deter potential customers. This can help customers feel more confident about their choice, thus helping to reduce returns. Look to a platform like Revere to seamlessly implement UGC on your site.
Virtual and Augmented Reality
Virtual and augmented reality technology allows customers to see how an item will actually look, without seeing it in person. The technology works by overlaying a product onto a live video of a customer with their mobile device or computer. The camera take a 360 degree scan of the customer using augmented reality, which is similar to AI as it uses algorithms and machine learning to create a 3D model. By helping customers visualize the actual item, VR and AR shopping can help reduce returns due to how accurately an item is described online.
Personalization and Optimized Discovery
AI can analyze data such as purchase history and demographics to target advertisements, special offers, and product recommendations that are relevant to each individual customer. Helping customers find exactly what they’re looking for and making the discovery process more efficient can reduce the need for customers to return items that didn’t fit their needs. Plus, personalization is a key strategy to building customer relationships, which will help improve the customer experience over time.
Whether or not the return rate is expected to decrease in 2026, retailers still must be prepared for a significant increase in returns in January, following the most trafficked time of the year for eCommerce.
How to Be Prepared and Get Ahead
Extend Return Windows
Though it may seem counterintuitive, extending your return window will help to spread out returns over a longer period to help manage the volume of returns your team is handling at once. Additionally, a more flexible return process will encourage customer trust and loyalty, resulting in increased conversions and revenue over time. Alternatively, updating your return policy to encourage exchanges by offering incentives can help reduce revenue loss from increased returns.
Consider Hiring Seasonal Staff
For periods when you expect an increase in the volume of returns, you may want to consider hiring additional staff to help manage returns and prevent fraudulent activity. NRF’s report also found that 9% of all returns are fraudulent. Ensure your staff is properly trained to detect return fraud, so you can verify that returns are being processed accurately.
Incorporate Third-Party Partners
Third-party software and logistics providers such as Happy Returns and Loop offer services that manage the entire returns process on behalf of retailers looking to streamline the returns experience. These systems are often automated, making the returns process more efficient and helping to reduce fraud.
Staying prepared for the holiday season can be a difficult challenge for retailers who have expansive inventory and complex omnichannel needs. Returns can be expensive and time consuming, and you’ll need an eCommerce platform that is ready to manage the increase in traffic. If you’re looking for ways to optimize your returns experience, or ready to switch to an eCommerce platform that’s built for growth, contact Virid today to set up a consultation and realize your eCommerce site’s full potential.
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