CareCredit Women's Wellness Index July 2024 Banner

Retailers Crack Down on ‘Serial Returners’

Retailers Crack Down on ‘Serial Returners’

As retailers grapple with the trillion-dollar returns problem, more merchants are beginning to penalize consumers for sending back items.

Take Boozt, a Nordic digital department store operating across Europe. The company shared in a press release Tuesday (June 25) that it has banned 60,000 customers who returned “an excessive number” of items. The company shared that it aims to crack down on “serial returners.”

“Now, approximately 60,000 customers out of a total of 3.5 million active customers are blocked,” Boozt Chief Financial Officer Sandra Gadd said, per the release. “The behavior has not stopped, but we have learned to identify this type of customer.”

In the fall, online fashion retailer Asos announced its own plans to address these so-called serial returners, with CEO José Antonio Ramos Calamonte arguing for a distinction between “good returns and bad returns.” Earlier this year, The Cut reported that the company had commenced lifetime bans for over-returning.

These moves come as retailers aim to balance consumers’ demand for free and easy returns with the cost of handling these returns.

“There is no such thing as a free return,” David Sobie, then vice president (now CEO) of  Happy Returns, told PYMNTS in an interview last year. “It’s just a question of who’s subsidizing the transaction. Free return for a shopper means the merchant’s paying. What we’re seeing retailers say is, ‘I’m going to have the free or the subsidized option be the one which is cheapest for me.’”

Still, consumers demand returns, and merchants that offer online returns tend to be doing better than those that do not. Specifically, merchants that expect an increase in revenue are 31% likelier to offer online returns than those that expect no revenue change, according to PYMNTS Intelligence’s “2024 Global Digital Shopping Index: SMB Edition,” commissioned by Visa Acceptance Solutions.

Plus, last year’s U.S. edition of the same report, which drew from a survey of more than 2,800 United States consumers, revealed that 44% of participants see returns as being very important to their digital shopping journeys. The same study highlighted an 11% awareness gap for free online returns, such that a share of merchants already offers the feature, but consumers do not know about it.

Many merchants, ranging from Amazon to H&M, have begun charging for returns on at least some purchases.

“If you want to charge, you better be damn sure you’re delivering an exceptional returns experience and exceptional purchase experience,” Loop CEO Jonathan Poma told PYMNTS in August.

Plus, retailers continue to raise the threshold for free shipping. Some are adopting returnless policies to address the challenge.

As companies like Boozt and Asos take a firm stance against “serial returners” by implementing bans, the industry grapples with finding a balance between cost efficiency and customer satisfaction. The underlying message is clear: While free and easy returns remain a key driver of online shopping success, they are not without their costs. Retailers are increasingly seeking ways to mitigate these expenses. Yet, the demand for seamless returns persists, and merchants must adapt to meet both their financial goals and the high expectations of their customers.

For all PYMNTS retail coverage, subscribe to the daily Retail Newsletter.