Many Unhappy Returns. Should all retailers charge for returns?

Good Growth - Many Unhappy Returns. Should all retailers charge for returns?

Chief Product Officer Mike Duke offers four key methods for assessing the impact of returns on profitability, to prevent more profits from being sucked away by rising numbers of returned items.


Retail organisations are facing significant headwinds as they prepare for one of the busiest trading periods of the year with increasing pressure to protect the bottom line. One such profit protection measure being adopted is to charge for returns, with Zara, boohoo and H&M being early adopters.

Unsurprisingly, this hasn’t been received well by their customers. There is a possibility that the loss in sales overwhelms the reduction in cost to serve.

As the industry approaches the busiest trading time of the year, introducing a charge for returns to the customer doesn’t need to risk commercial performance.

In fact, this represents an opportunity for retailers to better understand the consumer, and innovate brand proposition in order to grow faster and more profitably as an organisation.


Good Growth CPO, Mike Duke, advises retailers to recognise the true value of customer data. By leveraging a unique blend of analysis and impact modelling, brands can mitigate risk whilst understanding customer objectives in order to have confidence in commercial outcomes.
In our approach we help organisations get closer to their customers and the value opportunity.


  • Data Analysis. How is the current commercial, qualitative and quantitative data captured, stored and utilised to drive changes in performance. What are the key themes in buying behaviour over time and how do returns influence the bottom line?
  • Customer Insight. How do customers describe their experience and behaviour, why do customers return and to what extent does the returns proposition drive conversion and loyalty?
  • Impact Modelling. Given what we know through the analysis and insight, what is the likely commercial impact of changes in the returns proposition? What is the optimal returns cost given the likely decline in sales volumes?
  • Experimentation. How do we test the introduction of a new returns proposition with end-to-end reporting of impacts? How do we balance conversion versus profitability and how do we factor the voice of the customer into our testing?


This approach has been successfully tried and tested by us, working with many fashion clients. We are a boutique digital consultancy. We help brands to understand digital failures and turn that into faster and more profitable growth.

In retail, one of the biggest causes of customer failures is a complex or unclear delivery and returns proposition. We worked with New Look to provide a better understanding of the role of delivery and returns in driving customer acquisition and loyalty. Our work helped them to optimise one of the most competitive delivery propositions in the fashion market. Check out our case study here.