Unlocking growth and efficiency through smarter returns: What Loop’s data tells us
Carly Greenberg
·October 3, 2025
With rising expenses due to global tariffs, inflation, and increased logistics costs, ecommerce merchants everywhere are taking a closer look at where they can cut operational costs – without cutting back on the quality of their products or negatively impacting their customer experience.
The solution? Re-think your post-purchase and returns strategy.
Many retailers look at returns as a necessary evil. As a result, their returns process is opaque and complicated, further alienating the shopper from purchasing from the brand in the future. In fact, 79% of consumers say they’d avoid a brand after a negative post-purchase experience.
Instead, take the opposite approach, and embrace the post-purchase process as an opportunity to renew engagement with your customers and unlock additional revenue. From order tracking to fraud prevention to returns, savvy brands are using best-in-class technology to help them develop engaging post-purchase experiences for their customers that build trust, drive loyalty, and protect profit margins.
With a solid post-purchase strategy in place, you’ll be able to transform returns from a cost center into a profit center, and use automation and customized workflows to help you drive growth and efficiency.
Want proof? Our latest data reveals how Loop merchants are thriving by protecting margins, driving growth, and automating smarter.
Driving growth and retaining customers
While the last year’s been a tough climate for ecommerce businesses in general, Loop merchants are outperforming the market – and seeing their bottom lines grow instead of shrink. Our brands are using deep segmentation and personalized policies to drive high engagement rates that lead to recurring revenue and higher AOVs.
Why Loop merchants are leading the way
Thanks to a combination of factors including consumer spending cutbacks and rising operational costs, ecommerce sales growth has slowed down this year, growing at a rate of 5.3% YOY in Q2 2025. But Loop merchants are outpacing the market: Our Enterprise brands are seeing an average 12.8% year over year growth.
When we dig into this number further, we see a clear example of the Pareto Principle (AKA, the 80/20 rule) in action: just 20% of shops drove 84% of this growth. This shows that the most successful brands are finding ways to accelerate, even in a tough market.
Pro Tip: Want to join the ranks of these best-in-class brands? Start by benchmarking your metrics against top performers, and learning from what they’re doing well. By adopting similar strategies in return pricing, policies, and customer experience, your brand can continually optimize its performance. Take advantage of tools like Loopʼs Return Policy Insights (RPI) tool, which gives you insights around how you stack up against similar brands and ensure that you’re keeping your returns experience fresh in an evolving market.
Protecting merchants’ bottom line in a tough economy
Rising tariffs and higher operating costs are putting pressure on ecommerce margins, while customers still expect flexible, hassle-free returns. Merchants are walking a fine line: protect revenue without sacrificing shopper trust.
The good news? With smarter tools and policies, it’s possible to do both. Let’s take a look at two key Loop tools that can help you deliver a superior customer experience while keeping your costs in check: Fraud Prevention and Checkout+.
Proactive Fraud Prevention
Returns fraud is a growing problem for brands, with a 64% rise in abusive returns over the last year alone. Brands need to build strategies that help them block the worst offenders, without setting up overly restrictive returns policies that might keep customers from converting in the first place.
By using Loop’s Fraud Prevention tools, you’ll be able to put guardrails in place that help you protect your profit margins without damaging your customers’ experience. Our Fraud Model algorithm analyzes thousands of return requests per day and instantly spots common “high risk” indicators that are likely signs of returns fraud, giving you the opportunity to review the transaction manually before denying or approving it.
To date, our Fraud Model has helped more than 4,000 merchants flag 285K+ high-risk returns. They’ve protected $1.5M worth of confirmed fraudulent transactions, with 88% accuracy in detection.
Consumer-Paid Returns (Checkout+)
Newsflash: It’s no longer the era of free return shipping. While shoppers may prefer free returns, brands are increasingly doing away with this perk as the costs of reverse logistics continue to escalate. While around 70% of brands offered free return shipping in 2021, the tide has turned: By 2024, 81% of retailers were charging for at least some forms of returns.
So how do you recoup revenue on reverse logistics without pissing off your shoppers? Transform return shipping into a premium experience that’s worth paying for.
With Loop’s Checkout+ tool, you can present your shoppers with a compelling offer: For just a small upfront fee during the time of purchase, they can unlock access to a free and convenient returns experience if they need it later.
An average of 70% of shoppers opt in to Checkout+ – far more than the number who’ll actually use the service. That revenue flows back directly to your brand, giving you the capital to subsidize both the cost of return shipping for those who use it, and your brand’s returns management software costs.
Enterprise adoption of return fees is up by 16% since January 2024, and we’ve seen zero negative impact on repeat purchases, which average 30% across the board.
Pro Tip: As the data illustrates, return fees are a proven way to recoup costs without sacrificing loyalty. Building a sustainable strategy for covering the costs of your returns will help you protect margins without impacting your customer experience.
Controlling the customer experience
Time and again, brands have found that delivering highly personalized experiences to their customers is key to driving higher sales volume and retention rates: Personalization increased AOV for an overwhelming 98% of shoppers, and 62% of businesses say personalization boosts customer loyalty rates.
Brands that use Loop’s Workflows tool to provide a customized experience for their VIP shoppers see similar results. In fact, implementing VIP workflows can nearly double repeat purchase rates (26% → 50%+), with a higher upsell value on Shop Now exchanges ($22 vs. $17).
Pro Tip: Building a frictionless, premium return experience for your most valuable customers builds immense trust and loyalty. Use Loop’s Workflows to segment your shoppers and waive fees or offer exclusive benefits for VIPs. This targeted approach not only retains your best customers, but also encourages them to spend more.
Optimizing the returns process for maximum efficiency
To combat rising expenses, brands are taking a hard look at their balance sheet – and using technology to increase their operational efficiency. By embracing automation to replace manual processes, your brand will be able to optimize productivity and cost savings, without negatively impacting your customers’ experience with your brand.
Efficiency translates directly to profitability: Automation saves both money and CX bandwidth.
Here’s a look at some key strategies for boosting your revenue through automating your returns management process.
Cost savings through automation
Loop’s self-service returns management system empowers your shoppers to initiate their own returns – meaning that you’ll be able to eliminate a significant volume of CX tickets related to returns management. For the average merchant, around 30% of returns are fully automated, which frees your support agents to dedicate time to more complex or high-priority cases that require hands-on support. That’s saved our brands a combined $27M in CX labor savings through automation in the last year alone.
Our tools also help drive cost-savings through efficiencies in reverse logistics: Merchants were able to preserve $145M in shipping savings through our consolidated bulk shipping partnership with Happy Returns, and our “Keep Item” Workflow, which blocks returns on items that aren’t cost-efficient for resale.
Pro Tip: If you’re still processing more than 30% of your returns manually, take a look at our Workflows, and Integrations to identify new ways to handle common scenarios. Setting up the right automated Workflows and customized policies will help you reduce manual labor and drive increased productivity throughout the returns process. Reach out to your Loop Merchant Success Manager for guidance on building a strategy that fits your key use cases!
Keeping policies fresh with RPI
Updating your returns policies regularly in response to changing market conditions, such as inflation and returns abuse, is crucial for striking the right balance between protecting your margins and providing a great customer experience. Do too much to protect profits, and you risk alienating loyal customers – but don’t do enough, and you may be leaving your brand vulnerable to abuse.
Wondering how your brand’s returns process stacks up against the competition? We recently launched Return Policy Insights, a new tool that our brands can use to benchmark their policies against industry best practices. To date, brands have viewed more than 8,000 insights through the tool, with 73% positive feedback. They’ve used the tool to help them update more than 200 policies, based on the recommendations they received.
Pro tip: The market is constantly evolving, and your return policies should too. Keep an eye out for recommendations from the RPI tool to ensure your policies are optimized for the current landscape – that will help you stay competitive and aligned with industry standards and customer expectations.
TLDR
Returns don’t have to be a burden – they can be one of the strongest levers for growth and efficiency that you have at your disposal. The latest data proves that using best-in-class returns management tools helps you do more than just defend your business’ margins. Instead, you can actively fuel profitability.
The takeaway is clear: smarter returns equal stronger growth.
Book a demo today to learn more about our Fraud Prevention Tool, Checkout+, Return Policy Insights (RPI), and more. Each one is designed to help you capture more value from every return and keep your customers coming back.
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With Loop, your brand can offer everything from refunds to direct exchanges to shopper incentives and more. Even better? These exchanges build your business.