Brands adjust return policies for the fourth quarter
Holiday sales growth is usually accompanied by more returns. Brands are testing extended return windows, free returns and exchanges, and prominent policy placement on product pages to improve conversion and retention.
What are the key facts?
- 1Retailers expect approximately 17% of holiday sales to be returned
- 258% of consumers have abandoned a brand because of its return policy
- 392% of consumers say return costs affect how they shop
- 4Brands are testing advertising copy promoting free returns
- 5Jones Road generated additional revenue from continued shopping during the return process
What happened?
Consumer spending in ecommerce and retail typically increases in the fourth quarter, followed by a rise in returns. A 2025 joint survey by Happy Returns and the National Retail Federation found that retailers expect approximately 17% of holiday sales to be returned. Loop said that more brands are temporarily adjusting return policies for the holiday season, such as extending standard return windows and offering free returns and exchanges to accommodate consumer travel and gifting needs. The survey found that approximately 58% of consumers had left a brand because of its return policy, while 92% said return costs affect how they shop. Brands can test related messaging in advertising copy and on product detail pages, such as highlighting the return policy near the add-to-cart button, and monitor click and sales performance. Returns can also become a secondary sales touchpoint, with brands recommending related products during the exchange process. Loop data showed that beauty brand Jones Road generated $197,000 in additional revenue from consumers continuing to shop during the return process and retained $3.1 million in sales by offering exchanges.
What does this mean for cross-border sellers?
As holiday orders increase, return policies directly affect purchase intent while also increasing return, exchange and reverse-logistics costs. Clearly display return and exchange terms on product pages and in ads, and use limited tests to determine whether a more flexible policy generates enough conversion and retained sales to justify the cost.
What should sellers do now?
- 1Review return, exchange, fee and deadline information on key product pages and checkout pages this week, place core policies near the add-to-cart button, and ensure consistent wording across platforms.Return-cost impact
- 2Select a group of high-traffic SKUs to test advertising copy featuring “free returns” or “free exchanges,” and compare click-through rate, conversion rate and order cost with the existing copy.ACoS / ROAS calculator
- 3Estimate return shipping, processing, write-down and refund impacts by SKU, then distinguish products suited to an extended return window, exchanges or the current policy.