Loop 2025 State of Ecommerce Returns Report: Returns Emerge as a Strategic Growth Engine
Loop has released its 2025 State of Ecommerce Returns Report, a benchmark study that reframes the way online merchants view product returns. Far from being a mere operational burden, returns are now being recognized as a vital driver of revenue retention and customer loyalty. By analyzing more than 13 million returns across 4,000 Shopify merchants, the report provides a data-rich snapshot of how the ecommerce industry is adapting to high costs, shifting consumer expectations, and the need for sustainable profitability.
One of the standout findings is that return fees have become the new normal. Seventy percent of merchants now charge them, compared to 65% in 2024. In Australia and New Zealand (ANZ), the figure reaches 73%, the highest of all markets. Contrary to fears of alienating customers, Loop’s data shows that revenue retention is thriving under these stricter policies, with ANZ brands retaining an impressive 45% of revenue through returns optimization. In fact, Loop brands collectively kept $516 million in 2025 that would otherwise have been lost. CEO Hannah Bravo underscored the shift, noting that return fees are “no longer taboo” but increasingly an expectation as ecommerce matures, especially when paired with proactive tools like smarter sizing and personalized return journeys.
The report also highlights that return strategies are becoming industry-specific. Merchants selling bulky goods, such as furniture and home items, are charging higher return fees to offset shipping costs, while those in competitive categories like accessories opt for low-friction experiences to maintain loyalty. Checkout innovations, such as Loop’s Checkout+ feature, allow consumers to purchase return coverage upfront, giving brands a new channel for cost recovery while preserving customer goodwill.
Trends across verticals reveal how consumer habits are evolving. Exchange rates are surging, with jewelry seeing a 30% year-over-year increase and intimates climbing 26%. Cosmetics and personal care brands stood out for fast processing and repeat loyalty. Return rates showed sharp variation: electronics saw a significant drop of 28%, apparel ticked upward by 8%, intimates declined slightly by 1%, while home goods surged by a staggering 144%, underscoring the logistics challenges of bulky items.
As Alexis Perlmutter, Loop’s Head of Data, explains, the most successful merchants are not trying to avoid returns but instead embracing them as a P&L opportunity. By automating processes, incentivizing exchanges, and rethinking the post-purchase journey, ecommerce brands are using returns as a strategic differentiator. In a year marked by economic uncertainty, tariffs, and logistical headwinds, returns have transformed from a liability into an arena for innovation, customer retention, and competitive advantage. The report’s message is clear: the brands that approach returns not as a problem to minimize, but as a customer experience to optimize, will emerge stronger in this high-cost environment.