The report finds that Maharashtra has the highest return rate in India, followed by Karnataka, Delhi, Uttar Pradesh, and Haryana, with Kerala having the lowest return rate
Bengaluru: Returns are a huge problem in e-commerce. They can go as high as 40% and brands could end up losing up to $20-30 billion in revenue to returns by 2025, according to a study by customer return platform Return Prime.
Almost 17.6% of all e-commerce orders get returned and in categories such as fashion and footwear, returns can go as high as 30-35%. Niche categories such as home and living, beauty and personal care and electronics also have high return rates.
The study reveals that more than 40% of items are returned due to size issues—both in apparel and footwear categories. Although e-commerce sales grew by 38% during the pandemic, the return problem multiplied by approximately 1.5-2 times.
Geographically, Maharashtra has the highest return rate with shoppers returning 19.1% of the products they order online. Karnataka follows with an 11.5% return rate, while Delhi has a 9.9% return rate, Uttar Pradesh at 8.7%, and Haryana at 6.4%.
The lowest return rate was found in Kerala at 1.9% followed by Madhya Pradesh which stood at 2.6%, Punjab at 2.9% and Andhra Pradesh at 3.1%.
Apart from India, the top three countries where return rates are the highest are US, UK, and Europe.
On average, stores lose a repeat revenue potential of 8% every year due to bad returns experience for customers. By using tech capabilities and advanced AI tools, brands can save over Rs 100 crore in revenue.
“Returns are extremely crucial to a fashion category brand – it drives conversion, lifetime value and repeat purchases,” said Shashwat Swaroop, founder, Return Prime. “Yet, due to surmounting cost of returns faced by top brands—they are looking to roll back generous easy returns policies. Brands charge a return fee, shorten the return window, increase logistics fees, roll-back refund to original payment mode, provide discounts to disincentivise returns etc. via our powerful return platform,” he added.
The study also finds that eliminating returns entirely leads to a 50% or more drop in gross merchandise value. Additionally, 84% of shoppers remain loyal to brands that offer an easy return policy.
