The Cost of Serial Returners and the Future of Returns: ZigZag & Retail Economics’s Fireside Chat

Returns are no longer a side note in retail – they’ve become a defining challenge of modern e-commerce. In a recent fireside chat, Al Gerrie, Founder & CEO of ZigZag, and Richard Lim, CEO of Retail Economics, explored why returns are rising, what customer behaviours are driving them, and how retailers can manage this £27 billion issue more effectively.

You can watch the full video below:

We’ve also compiled the key takeaways from their discussion:

Returns Are Growing Alongside E-Commerce

Over the past decade, online shopping has doubled its share of UK non-food sales. That growth has come with an unavoidable side effect: more returns. UK consumers buy around £130 billion worth of non-food products online annually – yet £27 billion of that is sent back. In other words, nearly one in five items never makes it past the doorstep.

And it’s not just fashion – the sector most synonymous with high return rates. Electronics, homeware, garden, and sports equipment are all seeing elevated levels of returns too. Globally, this is a shared problem.

Four Types of Returners

The research identified four distinct consumer groups driving returns:

• Occasional Returners (43% of consumers) – They send items back only when absolutely necessary (e.g. faulty goods).
• Efficient Returners (35% of consumers) – They don’t return frequently, but when they do, it’s quick and painless for retailers.
• Slow Returners (11% of consumers) – Often younger consumers who take weeks to send items back, causing stock and cash flow headaches.
• Serial Returners (11% of consumers) – A small group responsible for nearly a quarter of all returns. They typically order multiple items with the intention of returning most of them.

Together, slow and serial returners – about 25% of customers – account for almost half of all returns.

The Hidden Costs of Returns

Returns are more than just postage fees. Retailers face expenses in:

• Processing & labour: unpacking, inspecting, sanitising, and grading returned goods.
• Stock depreciation: slow returns often mean goods can’t be resold at full price.
• Customer service: delays create refund complaints and risk damaging brand loyalty.

Even small improvements can transform profitability. A mere 1% reduction in return rates can add tens of millions of pounds to a major retailer’s bottom line.

Smarter Strategies to Tackle Returns

Al Gerrie and Richard Lim highlighted several tactics retailers are using to combat the challenge:

1. Digitisation of Returns

Out with paper forms, in with returns portals. Digital systems give retailers real-time data on who is returning what, when, where, and why. That transparency allows for better stock management and faster refunds.

2. Exchanges & Gift Cards

Encouraging customers to swap for a new size or accept gift cards keeps them shopping with the brand, rather than waiting weeks for a refund.

3. In-Store Returns to Drive Footfall

Retailers like New Look and Next incentivise customers to return in-store, boosting footfall and the chance of additional purchases. For example, offering free in-store returns but charging for postal returns has doubled returns-related footfall for some brands.

4. Paid Returns Policies

More retailers are now charging for returns. While controversial at first, consumers – particularly younger shoppers and even serial returners – are increasingly willing to pay for seamless, convenient options.

5. Using Returns Data to Fix Root Causes

High return rates sometimes point to deeper issues: poor sizing guides, inaccurate product descriptions, or even inadequate packaging. Retailers can flag “toxic products” with unusually high return rates and make smarter buying decisions in the future.

The Role of Technology and AI

Generative AI (GenAI) and advanced analytics are set to reshape returns management:

• Personalisation: offering free returns to VIPs while charging occasional shoppers.
• Segmentation: tailoring policies by customer value, order size, or product type.
• Predictive insights: spotting patterns in toxic products or problematic suppliers before they hurt margins.

Digitisation also unlocks faster refunds, better warehouse planning, and smoother customer communications – making returns less of a “Christmas morning surprise” for staff.

The Global Complexity of Returns

As UK retailers expand internationally, returns get trickier. Customs paperwork, duties, and cross-border logistics create friction for both retailers and customers. Solutions like duty drawback systems, local warehouses, and consolidated returns hubs in Europe are helping reduce costs and improve speed.

Still, unless the process is seamless, transparent, and affordable, international shoppers will hesitate to buy again.

What’s Next for Returns?

Returns aren’t going away – in fact, social commerce and marketplaces may push them higher as impulse buys increase. Lockers, home collections, and 24-hour drop-off points are set to play a bigger role as convenience becomes non-negotiable.

Retailers who view returns not as a cost sink but as an opportunity – to improve customer experience, boost footfall, and strengthen loyalty – will be the ones who win.

As Al Gerrie put it, “Your returns page is probably the second most important page on your website after checkout.” Customers check it before they commit to buy, and a poor experience can lose them for good.

Final Thought

Managing returns is no longer a back-office chore; it’s a boardroom issue. The difference between profitable growth and margin erosion often comes down to how retailers handle that £27 billion problem. By digitising processes, offering smarter return options, and using data to drive change, retailers can turn a costly headache into a competitive advantage.

🔑 In summary: The future of retail returns will be shaped by data, technology, and customer-centric design. Those who embrace it will not only cut costs but also build stronger, more loyal customer relationships.

Join us at Returnsfest to hear more from Al and Richard

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