Stricter Return Policies Could Put £34 Billion of UK Retail Sales at Risk, Study Warns

UK retailers risk losing billions of pounds in annual sales if they continue tightening return policies, according to new research that suggests shoppers may take their business elsewhere rather than accept stricter rules.

The warning comes from logistics technology company Locus, which estimates that as much as £34.1 billion in retail spending could be at risk if consumers reduce purchases in response to return fees and tougher return conditions.

The findings arrive at a challenging time for the retail sector, which is already dealing with fragile consumer confidence, rising operating costs and pressure on profit margins.

According to data from the Office for National Statistics, spending on textiles, clothing and footwear in the UK reached approximately £57.8 billion over the past year. Locus said a significant share of that spending could be affected if retailers continue introducing measures designed to reduce the cost of returns.

The study, based on a survey of 2,000 UK consumers, found that 59 per cent of shoppers would be less likely to buy from a retailer that introduced return fees or stricter return policies. More than half, 56 per cent, said they would switch to another retailer if faced with such changes.

The research also challenges the assumption that return charges encourage customers to keep unwanted items. Only 38 per cent of respondents said they would hold on to products rather than return them if a fee were imposed. Meanwhile, one in five shoppers said they expect or plan to return goods from most of their online purchases.

The findings come as several fashion retailers move to curb rising return costs through tighter policies. Companies have introduced shorter return windows, additional charges and restrictions for frequent returners in an effort to protect profitability.

Locus Chief Revenue Officer Subhro Chakraborty said retailers face a difficult balancing act between controlling costs and maintaining customer satisfaction.

“Returns have become one of the most complex challenges facing retailers today,” Chakraborty said. “While there is understandable pressure to reduce return-related costs, overly restrictive policies can create friction at a critical stage of the customer journey.”

He argued that retailers should focus on reducing avoidable returns rather than penalising customers. Better product descriptions, improved sizing information, stronger inventory management and more efficient fulfilment systems could help shoppers make more confident purchasing decisions.

Industry experts say many retailers are increasingly turning to technology and data-driven solutions to improve profitability without damaging customer loyalty.

The report suggests that while return fees may provide short-term savings, they could also discourage spending and weaken long-term customer relationships. For a sector where every sale matters, the prospect of £34.1 billion in spending being placed at risk serves as a reminder that improving the shopping experience may be more effective than making returns more difficult.