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.
The main takeaway for retailers: even with modest year-over-year improvement, returns remain a significant and unavoidable cost of doing business, especially during the holidays. Customers have also come to expect a seamless returns experience as table stakes, not a bonus. Making that process painless for shoppers, without draining your team’s time and resources, is the challenge every eCommerce retailer faces this time of year.
How to Prevent Returns
Clearly Outline Return Policy
It sounds counterintuitive, but a transparent return policy is actually one of th emost effective tools for preventing returns. 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 in plain language 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.
It’s worth noting that shopper expectations around returns are climbing: 82% of consumers now say free returns are a major factor in their purchase decisions, up from 76% the year before. A policy that does not meet these expectations may risk losing the sale altogether.
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
AR and VR tools let customers preview a product in their own space, or on their own body, before they ever click “buy.” Using a phone or computer camera, these tools scan the customer and overlay the product onto a live image, generating a 3D model that shows fit, scale, and appearance with far more accuracy than static photos alone.
This kind of visualization is especially effective for categories with historically high return rates, like apparel, footwear, and furniture, where “it looked different online” is one of the top reasons customers cite for sending items back.
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.
How to Be Prepared and Get Ahead
Extend Return Windows
Extending your return window may feel like it invites more returns, but in practice it does the opposite for your team’s workload by spreading returns over a longer period. 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
Just as retailers hire seasonal staff to manage the holiday sales rush, it’s worth budgeting for seasonal support on the returns side as well. NRF’s report found that 9% of all returns are fraudulent. Properly trained seasonal staff can help your team process the January surge quickly while catching fraudulent activity before it eats into your bottom line. Many retailers are now using AI tools specifically to detect and prevent return fraud. This may be helpful to consider as you plan your budget.
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.
49% of retailers say increasing their focus on third-party logistics partners is a top strategy for managing holiday returns, so consider how this can help your business this season.
Looking Ahead
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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