Retailers have spent the last decade optimising every inch of the customer journey, from slicker checkouts to next-day delivery. But one stage remains largely overlooked: returns.

For consumers, the expectations have shifted. In an age of on-demand everything, waiting 7 to 21 days for a refund feels outdated. For retailers, meanwhile, returns are often accepted as a cost of doing business, frustrating, yes, but inevitable. It’s time for a new mindset. Returns don’t have to be a burden. In fact, they could be one of retail’s biggest untapped opportunities, says Nikhita Hyett, General Manager EMEA at Signifyd.

Why returns matter more than ever

Returns are no longer just about logistics, they’re about loyalty.

Our data shows 76% of European consumers say return policies are a key factor when choosing where to shop. That’s a majority of your customer base expecting convenience, clarity and speed, not fine print.

And they’re voting with their wallets. Half say they’d be less likely to shop with a retailer that only offers store credit, while 57% are deterred by restocking or return fees. In a competitive landscape, poor returns experiences are costing more than stock, they’re costing lifetime value.

Trust is built in the moments that matter, and returns are one of them. Offering faster refunds or free returns is a good start, but it is not just about speed. It is about being transparent, responsive and consistent when things go wrong. Whether it is a missing refund, an unclear policy or a return rejected without explanation, how a retailer handles that moment can either earn long-term loyalty or drive a customer away.

As expectations rise, the industry must move beyond surface-level tweaks and invest in return processes that are as reliable and customer-focused as any other part of the journey.

A smarter approach to risk

Retailers often shy away from return innovation due to one key concern: risk.

There’s a persistent fear that removing friction will open the floodgates to abuse, including wardrobing, fraudulent returns or excessive refund claims. But treating every customer like a potential fraudster damages trust. And it misses a vital opportunity for personalisation.

“Just as we no longer treat every online purchase the same, why should every return follow a one-size-fits-all model?”

Imagine this, a customer who has a strong purchase history buys a pair of shoes online. They don’t fit and are returned in perfect condition. Why should that shopper wait days or even weeks for a refund? Now compare that to a customer with multiple chargebacks, late returns or damaged items. Clearly, not all returns are equal.

By leveraging identity, transactional and behavioural data, retailers can implement a system that applies instant refunds to trusted customers and adds friction only where risk warrants it. This approach doesn’t just reduce fraud. It creates a smoother, fairer experience for everyone and drives long-term customer loyalty.

Building intelligence, not just efficiency

A frictionless return doesn’t mean a reckless one. With the right tools and intelligence, it’s possible to deliver instant refunds to high-trust customers while identifying and mitigating risky behaviours.

This balance is crucial, particularly as returns are projected to reach nearly $1trillion globally by 2030. Handling them reactively is neither economically nor environmentally sustainable. But handled well, returns become a strategic lever, not a liability.

Retailers should also realise that returns are more than reverse logistics — they’re insight goldmines.

In fashion, up to 40% of returns are due to misleading product details. Tracking the reasons for returns at scale allows retailers to refine product descriptions, improve photography and flag recurring quality issues.

More than that, it creates a feedback loop. Retailers can use return data to improve inventory decisions, tailor product recommendations and predict future buying behaviour. The result? Fewer avoidable returns, better CX and smarter operations, all driven by returns data most retailers are already sitting on.

That’s where the right tech and partnerships come in. Platforms that combine machine learning with behavioural insights can help retailers verify returns quickly, detect abuse patterns, and even shift liability, enabling retailers to focus on their core business, not back-office disputes.

Looking ahead: returns as a loyalty driver

What if we started educating customers about their returns behaviour the way we do credit scores or loyalty tiers? Rewarding positive behaviour with instant refunds, transparent timelines and seamless experiences can be a powerful motivator.

It’s not about punishment, it’s about mutual trust so that customers get faster, more reliable service and retailers gain clearer insights, fewer losses, and deeper loyalty. Returns will always be part of ecommerce. But in 2025 and beyond, the winners will be those who stop seeing them as sunk costs and start seeing them as a moment to win a customer for life.