Loop Returns urges UK retailers to rethink global returns

Loop Returns has placed international returns in focus as UK online retailers expand cross-border sales and face rising cost pressures in reverse logistics.

The company said many retailers still treat overseas returns as an afterthought, even as they invest in cross-border shipping, website localisation, and market pricing. Return flows add operational complexity and can shape customer perceptions in new markets.

Global online retail continues to grow. eMarketer expects global eCommerce sales to reach $6.3 trillion by 2025. Statista has put online return rates at between 20% and 40%, depending on category and market. Fashion often sits above that range.

Loop Returns said international returns sit at the centre of a cost-and-customer-experience trade-off for UK brands. The company pointed to recent policy changes from major fashion retailers as evidence of tighter approaches to return costs.

Policy Shifts

Returns have become a contentious topic for several UK-facing fashion brands. ASOS, which ships to more than 200 markets, introduced stricter measures in 2023. These included account flags for frequent returners and paid returns in some markets. Boohoo and Zara have also charged UK customers for returns.

Retailers have faced higher warehousing and shipping costs. Loop Returns also cited post-Brexit trade frictions and updates to EU customs processes as additional factors that raise the administrative burden around returns.

"As UK retailers scale internationally, the spotlight often falls on front-end priorities like cross-border shipping, website localisation and pricing strategy. But one crucial and often under-optimised area continues to lag behind: international returns," said John-David Klauser, General Manager International, Loop Returns.

Local Workflows

Loop Returns said domestic returns processes often translate poorly to overseas markets. Customers face different carrier options, delivery norms, and expectations around timelines and refund handling. Retailers face longer transit times, higher shipping charges, and added customs processing.

The company said retailers have increasingly adopted technology platforms that set region-specific returns workflows. These systems can route returned items to different destinations such as a UK warehouse, a European third-party logistics provider, or a North American distribution hub.

Loop Returns said retailers can also vary policy terms by country, including return windows, restocking fees, and return shipping charges. The company said this approach reflects local carrier pricing and market norms.

Language and localisation also remain central to cross-border trade. CSA Research has reported that 76% of global consumers prefer to shop in their native language. Loop Returns said this preference extends to post-purchase journeys, including returns portals and customer communications.

Customs Complexity

Cross-border returns add customs declarations and duty handling to the process. Loop Returns said post-Brexit changes have increased the volume of paperwork and the risk of costs appearing after goods re-enter a market.

The company cited new layers of volatility around tariffs and administrative processes. It highlighted potential impacts of changes to EU tariff rates and border checks scheduled for 2025, with apparel and footwear returns exposed to unexpected duties or fees even when products are returned to their point of origin.

Loop Returns said some brands have faced import VAT applied twice if customs handling does not use the correct codes. It also said misclassified returns can trigger additional duties and delays.

Retailers have responded by revisiting their returns networks. Loop Returns said brands have looked at localised return hubs in European markets such as Germany and the Netherlands. It said this reduces cross-border movements and limits exposure to repeat duties on the same items.

Platforms And Carriers

The company pointed to cross-border eCommerce providers such as Global-e and Passport for selling into overseas markets. It also referenced integrations with international carriers such as DHL and UPS. Loop Returns said such connections allow automated label creation and parcel tracking. It also said systems can select routes based on cost and tariff conditions for the destination market.

Loop Returns said dynamic routing factors in product type, return reason, geography, and trade codes. It cited research from the Reverse Logistics Association suggesting that optimised return flows can cut logistics costs by up to 30%.

Returns Data

Loop Returns also highlighted the use of returns data as an operational input across merchandising, product design, and fulfilment. It said analytics can highlight regional variation in return causes, including size and fit issues or damage rates linked to a specific fulfilment location.

"Understanding why items are returned and how that varies by region is invaluable for eCommerce businesses looking to reduce costs and improve customer experience," said Klauser.

Exchanges Focus

Loop Returns said retailers have increased their focus on exchanges as an alternative to refunds. The company said return journeys that offer exchanges inside the portal can reduce refund volumes and retain revenue.

It also cited consumer research indicating that some shoppers accept paid options when they offer convenience. "Our recent research has also shown that 70% of shoppers are willing to pay for a more convenient, premium return experience," said Klauser.

Loop Returns describes itself as a commerce operations platform used by more than 5,000 Shopify merchants. It works with UK brands including TM Lewin, Represent, Adanola, Nobody's Child, and Oh Polly.

"As eCommerce matures and global competition intensifies, returns may prove to be the next frontier for differentiation and not just operationally, but experientially," said Klauser.