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Research - 14.02.2025 - 09:30 

E-commerce is driving up the number of returns – but “return mania” is waning

The days after holiday season are traditionally the peak season for parcel returns as unwanted gifts, such as clothing that doesn’t fit, are being returned to retailers. As an analysis by the University of St.Gallen shows, the proportion of returns has fallen since 2022 despite an increase in online orders. The post-Christmas gift hangover in 2023 and 2024 is weaker than it was in previous years.

HSG researchers have analysed retail returns in Switzerland using electronic payment data – looking at timing, product category and transaction channel. The team, led by Prof. Dr. Matthias Fengler (Faculty of Mathematics and Statistics) and Prof. Dr. Winfried Koeniger (Swiss Institute for Empirical Economic Research, SEW-HSG), analysed the amount of refunds in Switzerland using data from Worldline Schweiz AG, a leading company in the field of payment transaction technology. These data are also used for the University of St.Gallen's Monitoring Consumption Switzerland initiative, which focuses on card transactions.

“The number of refunds after the Christmas shopping season has fallen in recent years. And this despite the fact that more transactions have been carried out via e-commerce, which normally is associated with more returns.”
Prof. Dr. Winfried Koeniger

The analysis focuses on returns in the categories of department stores, clothing and electronics. It highlights three key developments:

Refunds over time:

  • Refunds typically peak in January.
  • On average, returns account for around 2% of sales volume.
  • Returns have been steadily declining until 2024, and the numbers are stagnating in 2025. (see Figure 1) 

Differences between product categories:

  • Department stores see the largest increase in returns in January (+0.8 percentage points compared to December).
  • For apparel and electronics, the increase in returns is more moderate (+0.1-0.2 percentage points). (see Figure 2)

Differences between online and offline purchases:

  • Returns for point-of-sale (POS) purchases are low.
  • For online shopping (e-commerce), return rates are significantly higher and vary by product category. Particularly in the apparel sector, the return rate is over 10 %, with peaks of up to 16 %.
  • Despite higher return rates in e-commerce, the combined refund share for POS and e-commerce transactions remains stable overall. (see Figure 1)

Figure 1: Refunds (% of sales) for department stores, apparel and electronics in ECOM and POS (28-day average)

Figure 2: Refunds (% of sales) around the holidays across by category (ECOM & POS, 28-day average since November 2021)

Figure 3: Refunds (% of sales) by category and payment type since 2023 (min./max. values of the 28-day average)

Returns have been decreasing since 2022 despite more online shopping 

The analysis suggests that the increase in online shopping, namely the shift from point of sale (POS) transactions to e-commerce, could lead to higher return costs – both for businesses and for society. Some of the costs associated with parcel delivery, such as environmental pollution, may not be fully factored into pricing by companies. These costs of online shopping need to be considered alongside the emissions generated by purchases made at point of sale.

However, despite more shopping being done online, the analysis shows that the proportion of returns has fallen since 2022. 


Main image: Adobe Stock / Leika production

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