Free returns helped power ecommerce growth, but rising fraud and policy abuse are forcing retailers to rethink the bargain. The answer may lie in targeted, data-led controls rather than blanket restrictions, according to a new report.
Returns have long been one of online retail’s most effective trust-building tools. Free, fast and simple processes give shoppers the confidence to buy products they cannot see, touch or try on first. With online sales accounting for 29.4 per cent of UK retail sales in June, their highest share since April 2021, that confidence remains commercially vital.
Yet the economics of that promise are becoming harder to sustain. Higher fulfilment, warehousing and markdown costs are colliding with more sophisticated forms of policy abuse. Retailers must now decide how to preserve convenience for honest customers while preventing generous policies from becoming a repeatable route to loss.
Suspicious returns move into the mainstream
Analysis of one million UK returns processed between July 2025 and May 2026 found that almost 39,000 were flagged as potentially suspicious, representing £29m in losses. Timing was a particularly strong signal: suspicious returns took a median 18.8 days to come back, almost twice the 9.5 days recorded for typical returns.
The behaviours involved range from casual over-ordering and wardrobing to false “item not received” claims, empty-box returns, counterfeit substitutions and fake tracking details. Academic research published in May 2026, based on nearly 500,000 posts across cybercrime forums, Telegram and Discord, suggests the threat is professionalising. Fraudsters openly exchange methods and sell refunds as a service, sometimes taking up to 30 per cent of the refund value for a guaranteed result.
That escalation gives the issue real commercial weight. Riskified has previously estimated that policy abuse costs UK retailers about £2bn a year, while University of Portsmouth research funded by Cifas suggests the narrower but more acute problem of online refund fraud could cost as much as £5.76bn annually. The estimates measure different parts of the problem, but together show that returns abuse is no longer marginal leakage.
Consumers want fairness — and convenience
Consumers themselves are conflicted. A Harris Poll UK survey of 1,000 adults found 69 per cent believe free returns should always be available and 62 per cent say a retailer’s policy influences where they shop. At the same time, 87 per cent believe serial returners exploit free-return systems and 72 per cent will accept limits if they help preserve free returns for the majority.
Wardrobing illustrates the tension. The same survey found that 32 per cent of UK shoppers have bought an item to use before returning it, rising to 43 per cent among under-34s. One in three said cost-of-living pressure had made the behaviour more common.
Even frequent returners, however, are not necessarily hostile to controls. Riskified found 73.2 per cent support stricter policies, compared with half of other shoppers, while 56.3 per cent favour personalised or tiered rules.
The message is that shoppers object less to rules themselves than to controls they perceive as indiscriminate. They want retailers to stop others exploiting the system, but do not want to be penalised for a legitimate return. That distinction matters when ordinary ecommerce behaviour can resemble abuse.
The danger of blanket restrictions
More than half of consumers have returned a product because it differed from its online images or description, while 45 per cent have bought multiple sizes and sent back those that did not fit. In categories such as fashion, footwear, beauty and lifestyle, those are predictable consequences of buying online rather than evidence of wrongdoing.
Blanket fees, slow refunds and broad demands for extra evidence may reduce some losses, but they can also punish loyal customers for problems caused by inaccurate imagery, unclear sizing or poor fulfilment. That risks depressing repeat purchase and increasing basket abandonment. At the other extreme, overly open policies allow opportunists to learn which claims trigger instant refunds, how often items are inspected and how long goods can be kept before return.
Generative AI further complicates the picture. Nearly half of consumers across Riskified’s seven-market study had used AI tools to help with a return or refund claim. That can help a genuine customer explain a poor experience, but it can also make an abusive claim sound more convincing. Polished language is therefore becoming less useful as a proxy for trust.
A smarter returns bargain
The emerging answer is risk-based returns management. Instead of applying the same friction to every shopper, retailers can combine customer identity, purchase and return history, category, return timing, carrier scans, item condition and claim type to determine the appropriate response.
A trusted customer with a long purchase history and a low-risk return pattern can remain on a fast, low-friction journey. A newer account, delayed return, unusual claim, mismatched carrier signal or repeated exception can be routed for inspection or manual review. In-store returns, item limits and checks before refund can add measured friction without changing the experience for everyone else.
Delivering that model requires stronger links between ecommerce, customer-service, warehouse and carrier data, backed by clear escalation paths. It also requires careful communication. Shoppers are more likely to accept targeted controls when retailers explain that they protect prices, service levels and continued access to convenient returns.
For retailers, the choice is not between customer loyalty and revenue protection. It is how to protect both. Static rulebooks struggle because genuine inconvenience, casual misuse and organised fraud can initially look alike.
Dynamic policies offer a more proportionate response: preserving speed and simplicity for trusted shoppers while introducing checks when the wider pattern signals risk. In the next phase of ecommerce, the retailers that manage that balance best will turn returns from a blunt cost centre into a more precise expression of customer trust.
To download the full UK playbook for smarter, fairer enforcement click here.
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