How to Combat Serial Returners: 7 Ways to Protect Your Business

People who return items excessively, also known as serial returners, are problematic for online businesses. Unfortunately for retailers, they are particularly prevalent in the fashion industry and come in many forms.

It’s challenging for consumers to gauge from images alone if a top or dress fits until they try it on, so some consumers order items in bulk (aka bracketing) to see what suits them in one fitting. A fairly harmless process in the mind of the consumer but harmful one to a retailer’s bottom line.

Then you have those that buy items with fraudulent intentions. Whether to buy for an event or to ‘front’ with on social media, one thing is in common, they get their refund and have no intention of paying for goods often.

Businesses should strike a balance between a fair returns policy that coincides with the law and one that influences genuine customers to buy. But, be too generous with a returns policy, and you could attract the wrong clientele - serial returners!

Serial Returners Uncovered

Here’s a brief look at three different types of serial returners:

Staging: Shoppers purchase products, such as expensive jewellery and clothes, to flaunt on social media before returning. It’s obviously possible to scour social media channels and link them to the suspected accounts of offenders, but it’s a lot of work for retailers and an ethically questionable use of consumer data. 31% of 18–25-year-olds in Germany admitted to partaking in returns in this form of returns fraud in 2022.

Wardrobing: Consumers order items to use or wear and return for a full refund. Just like staging it’s considered a form of return fraud. Around a fifth of US consumers decided to try their luck at wardrobing in 2023.

Bracketing: Buyers order multiple variations of the same item before returning everything that doesn’t fit. Due to the fact consumers can’t try items on like they would in a changing room, retailers have been more forgiving of this returns abuse in the past. Especially as eCommerce was growing, brands didn’t want to dissuade consumers from their online store with harsh anti-bracketing measures. An astonishing 59% of 25–35-year-olds in the UK bracketed their purchases in 2023.

Wardrobing and staging frauds businesses out of time, resources, and money spent processing unnecessary returns. Also, increased deliveries and packaging impact the environment.

Bracketeers, however, do not always knowingly or intentionally order lots of items with a premeditated view of returning all of them. And may not be aware of the impact bracketing has on a business and the environment.

Distinguishing serial returners who commit fraud and being mindful of customers who are making honest purchases are essential to avoid changing a returns policy that could tarnish a brand's relationship with loyal and genuine customers.

While eradicating all serial returners might be tricky, there are methods to deter or stop serial returners from reoccurring. For instance, online fashion retailer PrettyLittleThing, has recently been cracking down on avid returners by introducing return fees:

• £1.99 for UK customers
• $4 for the US and Canada
• 5 euros in Europe
• 14.99 NZD in New Zealand

They’ve also started closing customer accounts with higher-than-normal return rates. Other brands that charge for returns include New Look, H&M, Next, UNIQLO and Zara. Most are not tackling serial returners quite as impressively just yet though, with Amazon and ASOS amongst the few that do.

Why are Serial Returners on the Rise?

To combat serial refunds, it helps to understand a buyer’s motives, so you can choose the best serial returner deterrent to keep loyal customers close and fraudsters at bay.

Why not?

Many consumers simply don’t understand or care about the impact of returns on retailers or the environment.  For instance, if a business offers free returns and/or delivery, this may attract people to commit to bracket their purchases, as it’s of no cost to them. In fact, 36% of UK consumers had never thought about the impact of returns on a retailer before being survey in 2022.

Gaming the system

Some people intentionally exploit a company's returns policy loopholes. For example, if a retailer offers free returns alongside a marketing promotion that provides free delivery over a certain order amount (a practise alarmingly common), it opens up a chance for consumers to game the system. The can intentionally order more than they need to activate the free delivery promotion, safe in the knowledge they can return the unwanted items for free anyway.

Cost-of-living Crisis

Cutbacks by consumers during the cost-of-living crisis have caused a surge in returns. ZigZag data reports that 35% of people are more likely to return products due to the crisis.

Poor Sizing

According to ZigZag data, 46% of shoppers bracket their purchases, which is buying multiple variations of the same item, and returning those that don’t fit or suit. This is up from 33% in 2021. It’s often due to different sizes between brands, particularly with womenswear and clothing in general, causing customers to order multiple sizes of the same product.

High Street Stores Closing

With high street shops closing in favour of moving online, customers can’t see and try products in person before buying and return to the store if it’s unsuitable. Which only exacerbates bracketing.

Considering the why behind serial returns is vital to put solutions in place that work to prevent serial returns from reoccurring.

How to Combat Serial Returners

Identify and Ban Serial Returners

Collecting and interpreting data via digital returns reporting software is a popular method for tracking serial returners. Allowing businesses to identify fraudulent activity and initiate a warning or ban on accounts. We recommend a soft approach to this. It is better to err on the side of caution, letting a few extra serial returners through won’t impact the business too much, but if you start penalising a chunk of your high-spending but also high-returning VIP customers, you could see a chunk of revenue disappear forever.

Charge for Returns

With 63% of UK retailers and 40% of US retailers charging for returns, fees are becoming the norm in returns policies.

Introducing return postage fees will discourage serial returners indulging in wardrobing or staging from making unnecessary purchases. Moreover, it’ll encourage all consumers to consider how certain they are about purchasing a particular product online - further avoiding excessive returns.

Limit Free Shipping

It’s tempting to offer free shipping and returns to all customers to stimulate buying behaviour. But offering deals like this to everyone may encourage serial returners to bulk buy.

So, where possible, target and offer free shipping and/or returns to regular, loyal customers, such as members, who have a track record of making more purchases than returns. And in turn, you’ll avoid giving free shipping privileges to serial returners.

Improve Images and Descriptions

Adding realistic sizing charts and comparisons for items, alongside clear, and detailed photos of products, provides people a realistic view of whether a product fits, suits, or looks how they expect before buying.

Being transparent about online products builds trust with customers and lessens the risk of bracketing, leading to excessive returns.

Use AI Tools

There are multiple enticing AI tools businesses can use to enhance the returns process and discourage serial returns. Here's a summary of AI virtual fitting rooms and predictive analytics:

Virtual fitting rooms

The Dressing Room, an augmented reality app used by GAP, lets customers try clothes on virtually.

This fascinating tool gives customers better product insight and helps people make informed and confident buying decisions which reduces returns.

Predictive Analytics

Predictive analytics for online businesses can collect previous returns data to fathom patterns and predictions about future returns. Over time, predictive analytics systems yield better predictions that help businesses identify fraud patterns or suspicious behaviour from serial returners.

The AI tools serve to optimise the returns process, for increased efficiency and customer satisfaction while weeding out serial returners. You can learn more about how AI and machine learning is being used to reduce returns on our blog here.

Reduce Returns Policy Windows

Whilst we recommend to actually offer a longer returns policy to present a more customer-centric approach to the returns experience, and because 95% of consumers return goods within a week anyway, that isn’t always the most appropriate action. If you are suffering from an increase in serial returners, particularly if many of your customers are suspected of wardrobing or if you are a fast fashion retailer, offering the shortest returns window legally possible (14 days for the consumer to signal their intent of returning) might help discourage them. You can use express carries to get goods back quickly.

Permit Gift Cards & Live Exchanges

Offering a flexible competitive returns policy through gift cards and live exchanges can attract and retain customers interested in making genuine purchases while cutting down on money lost through refunds.

For instance, giving customers the option of a quicker refund via store credit at the point of return means businesses can save the sale and keep the money in the business. It’s also genuinely appreciated by high-spending customers, with 46% happy to take a store credit refund without a monetary incentive.

Alternatively, with live exchange software, customers can swap items, which again keeps the money in the business and basically cancels the return entirely. 84% of customers would appreciate the option to exchange their product rather than complete the return.

Why You Should Protect Your Business from Serial Returners

To conclude, here’s a summary of why retailers like PrettyLittleThing are doubling down on serial returners.

To Reduce Costly Returns

Excessive refunds eat away at profits. After all, on returning, items need to be graded, cleaned, fixed, repackaged, stored and restocked, which takes time and manpower to do.

To Protect the Environment

With increased deliveries transporting unwanted goods back to businesses. There's the risk of companies accruing higher carbon footprints. Plus, the more travelling items endure, the more likely they are to get damaged - and subsequently sent to a recycling company, heavily discounted or, worse still, sent to landfill.

To Sell Stock within a Sales Window

For products with a small sales window, for instance, seasonal stock or fast fashion, there’s less time to sell goods within a set timeframe. And with items stuck in the returns loop for too long, they could miss their sales window completely. Meaning, that stock that is no longer sellable goes to waste, or items need to be stored until the next sales window appears.

While not all consumers are knowingly abusing the system. Sometimes generous returns policies give customers the idea that it’s okay to buy a lot, and if needed, return the items if they’re not suitable.

But this also poses challenges for businesses, because the returns process is still time-consuming and costly regardless of whether it’s a genuine purchase or someone defrauding the system.

In Conclusion…

Adding preventative measures by adjusting returns policies, and using tech such as returns portals and AI tools helps eliminate the threat of serial returners abusing a company's refund system and sending their goods back to vendors.

But, as discussed above - not all serial returners are knowingly exploiting businesses through serial returns. Therefore, be mindful of penalising honest and loyal customers, as it could affect the brand's relationship with its customers.

So be mindful of this when choosing a portal and tools. To ensure your company has enough flexibility in the refund policy to attract and retain customers. Yet, it’s strict enough to stop a business from becoming susceptible to fraudulent activity, like wardrobing and staging.

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