Australia’s ecommerce market is experiencing a significant issue with returns and exchanges, according to new research from Loop. The study found that more than half of Australian shoppers have walked away from a brand due to its returns policy, highlighting the importance of a well-handled returns process in maintaining customer loyalty.
The research, which surveyed 1,000 Australian consumers and 200 retail decision-makers, revealed that 55% of shoppers have stopped shopping with a fashion brand or abandoned a purchase because of its returns policy. This suggests that the way a brand handles returns has become a major factor in determining customer loyalty.
Returns Policy Affects Purchase Decisions
For Australian shoppers, the returns policy is no longer an afterthought, but a key consideration before making an online purchase. 85% of shoppers say they check a retailer’s returns policy at least sometimes before buying, with one in three checking it every time.
Return fees also play a significant role in shaping shopping behavior, with 91% of shoppers saying that fees change how they shop online in some way. Half of the shoppers surveyed said that fees make them more careful about what they buy, while over a third said they shop less often with retailers that charge them.
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However, the research also found that some shoppers are willing to pay a small upfront fee for a more premium returns experience, with 21% of Australians saying they would be willing to do so. This presents an opportunity for retailers to reduce customer churn due to return costs.
Australia Leads in Exchanges
Australian retailers are moving faster than their overseas peers in shifting from refunds to retained revenue, with 53% of retailers using instant exchanges, compared to 50% in the US and 45% in the UK. Additionally, Australia has the lowest share of returns settled as cash refunds, at 42%, compared to 43% in the US and 53% in the UK.
Hannah Bravo, CEO of Loop, commented on the findings, saying that shoppers are judging brands on their post-purchase experience, and that a bad returns policy can drive customers away. She noted that the ultimate outcome of a return experience is a major driver of customer retention, and that retailers who recognize this can gain a significant advantage.
According to Bravo, the value of providing a good returns experience is substantial, with over $2 billion globally in retained revenue available to brands that get it right. The research also found that 86% of Australian shoppers are willing to take an exchange under the right circumstances, highlighting the potential for retailers to reduce customer churn and increase loyalty.
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Key Findings
The research highlights several key findings, including the fact that 57% of shoppers always or often check a retailer’s returns policy before buying, and that 34% of shoppers would try new brands and 32% would buy more if they had greater confidence in a retailer’s returns policy. Additionally, 68% of Australian retailers agree that the returns experience significantly affects customer loyalty.
The study also found that there is a significant gap between the importance that shoppers place on returns policies and the importance that retailers place on them. While 55% of shoppers have stopped shopping with a brand due to its returns policy, only 10% of retailers see customer churn as the biggest financial impact of returns.
Methodology
The independent research was conducted online by Sapio Research on behalf of Loop between May and June 2026. The study surveyed 1,000 Australian consumers who had made an online return in the previous six months and 200 Australian retail decision-makers responsible for ecommerce returns strategies.