Business

The Great Indian Return Rush: How Retailers are Tackling the Rising Wave of Returns

In an era of digital shopping, India’s retail landscape grapples with a growing challenge—product returns. With the rise of e-commerce and the increasing trend of ‘try before you buy,’ returns are surging at an unprecedented rate, pushing retailers to rethink their strategies. The question is, how are Indian retailers navigating this challenge while keeping customers happy?

The Soaring Cost of Returns

According to global trends, retail returns in 2023 amounted to a staggering $743 billion, which is only expected to rise. India, too, is witnessing a surge in return rates, particularly in the apparel and home goods sectors, where consumers often return products due to issues with size, fit, or quality mismatches. With shoppers becoming more comfortable returning items, businesses face mounting logistical costs and concerns over fraudulent returns.

The Role of E-Commerce in Rising Returns

With the rapid expansion of India’s e-commerce sector, online shopping has revolutionized consumer behaviour. However, this convenience has led to higher return rates. Unlike physical stores, where customers can try before buying, online shoppers rely on images and descriptions, often leading to disappointment upon delivery. The concept of ‘the bedroom as the new trial room’ has become a reality, where buyers order multiple sizes or styles to return what doesn’t fit.

A growing trend among young shoppers, known as ‘bracketing,’ involves purchasing multiple items to keep only a select few. This practice, coupled with rising instances of ‘wardrobing’—where customers wear items once and return them—has added to the complexity of return management.

Balancing Fraud Prevention with Customer Satisfaction

Retailers are walking a fine line between curbing return fraud and ensuring a seamless shopping experience. While fraudulent returns are not the majority, they pose a significant issue, from return policy abuse to falsely claiming defective products. Some major retailers have tightened return policies, implementing stricter timelines and restocking fees to deter habitual returners.

Despite these measures, the modern Indian consumer—especially Gen Z and millennials—expects hassle-free return policies. Any excessive restrictions could drive them to competitors, making it crucial for brands to strike a balance.

Industries Hit Hardest by Returns

Specific retail sectors face a more significant burden when it comes to returns. Apparel leads the pack, as consumers struggle with inconsistent sizing across brands. Seasonal shopping spikes—such as festive sales during Diwali or the wedding season—further amplify the issue. Home goods, including furniture and décor, also see high return rates due to colour mismatches, size discrepancies, or damage during shipping.

Beyond financial strain, returns are causing a sustainability crisis. A significant portion of returned merchandise eventually ends up in landfills, contributing to environmental concerns. As Indian consumers grow more eco-conscious, retailers are pressured to introduce sustainable return policies, including incentivizing exchanges over refunds and minimizing waste.

How Retailers Are Adapting

To tackle these challenges, Indian retailers are taking innovative steps:

Paid Return Shipping: Several brands are shifting away from free returns, charging nominal fees to discourage excessive returns.
Shorter Return Windows: Many retailers have reduced their return periods, ensuring faster inventory turnover and minimizing fraudulent claims.
Keep It, Get Refunded: Inspired by global giants like Amazon and Walmart, some sellers now allow customers to keep low-value items while receiving a refund, cutting logistics costs.
AI & Data Analytics: Advanced tracking tools help identify serial returners, allowing retailers to customize return policies based on shopping behaviour.
Loyalty Programs: Some brands are leveraging customer membership programs that offer free returns as a perk, rewarding genuine buyers while keeping habitual returners in check.

The Future of Retail Returns in India

As return volumes continue to climb, the Indian retail industry must find ways to curb unnecessary returns without compromising customer trust. More intelligent logistics, better product descriptions, virtual try-ons, and AI-driven fraud detection will be key in reshaping return policies.

Ultimately, the goal is clear—Indian retailers must balance reducing return rates and ensuring an exceptional shopping experience. With evolving consumer expectations and technological advancements, the future of retail returns in India is bound to be dynamic and transformative.