Returns Happen 2023: An inside look at the current 
state of online returns

The COVID-19 pandemic caused significant changes in the retail and supply chain industries, especially in e-commerce. Merchants had to rapidly adapt their e-commerce strategies in response to global lockdowns and store closures. E-commerce quickly outpaced other channels. This rapid shift set a new benchmark for online shopping experiences. 

In a post-Covid world, as e-commerce sales continue to grow, online returns have moved in the spotlight. A convenient and efficient returns process is now a key competitive advantage for omnichannel merchants. Online returns have the power to make or break a sale in today’s market.   

We conducted our annual merchant and consumer surveys to understand evolving shopping habits, online returns preferences, and how merchants are responding to rising return rates.  

The result is our 2023 Returns Happen report, and here’s a sneak preview of what we learned: 

Cover page of document with photo collage and title.

Key findings from Returns Happen 2023 

  1. In-person returns are no longer a nice-to-have, they’re a must-have: In-person returns are still the No. 1 most preferred return method by shoppers and growing in popularity, with a 26% increase year-over-year    

  2. Mail returns are no longer acceptable for the vast 
majority of shoppers: 90% of shoppers avoid or refrain from shopping with merchants that require mail returns, and 55% of shoppers have abandoned a purchase because there was no convenient return option.  

  3. The success of in-person returns depends on the size of the returns network: 94% of shoppers are willing to travel up to 2 miles for box-free in-person returns, highlighting the power of proximity.

  4. Returns aren’t slowing down: More shoppers are returning orders for refunds instead of making exchanges and 87% of merchants reported an increase in return rates this year. 

  5. Merchants are feeling the impact of higher return volumes: 79% of merchants surveyed have had to choose between shipping new orders vs processing returns due to limited warehouse resources.  

  6. Merchants are adding return fees to offset the increase: 81% of merchants surveyed started charging for at least one return method in the last 12 months predominantly to help reduce return rates.  

  7. How merchants implement return fees matters: After introducing return fees, 59% of merchants said shoppers opted for the least expensive option, and 33% reported losing customers, underscoring the need for a careful and considerate approach when implementing fees.    

E-commerce returns continue to evolve 

The world of returns is evolving quickly, providing businesses an opportunity to update their return strategies to meet shoppers’ expectations. Merchants that want to exceed expectations may consider adding or expanding their return policies to include in-person returns and give shoppers the return method they want the most.  

By partnering with the right in-person returns provider, merchants can test different fees and incentives to guide customer behavior. They can also improve the proximity of drop-off points, ensuring they are close to customers. And they can enhance their reverse logistics capabilities for smoother returns and better overall visibility.  

Read all the details in Returns Happen 2023 

Since returns are here to stay, merchants can leverage their return process to delight shoppers, reduce expenses, and retain revenue.  

To learn more about the latest consumer and merchant preferences and trends, download Returns Happen 2023.  


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About the research 

Both surveys were conducted in partnership with TRC, an independent research firm, and commissioned by PayPal, include the results from 2,000 U.S. shoppers and 200 Enterprise apparel/footwear merchants. 

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