Loop, a leading commerce operations platform, has released its 2025 State of Ecommerce Returns Report, analyzing over 13 million returns across 4,000 Shopify merchants, which indicates that returns are now a critical component of revenue retention and strategic growth rather than merely a cost of doing business.
The report highlights that return fees are becoming standard practice, with 70% of merchants now implementing them, an increase from 65% in the previous year. This shift has contributed to significant revenue retention, with brands collectively retaining $516 million in 2025 through optimized returns processes.
Hannah Bravo, CEO of Loop, commented on the findings, stating, “Ecommerce brands face enormous challenges to maintain profitability in today’s economic climate. But Loop’s benchmark data shows that return fees are no longer taboo – they’re now the expectation as ecommerce matures. By investing in smarter sizing tools, optimizing product detail pages, and delivering personalized return experiences, we’re confident the most proactive brands will emerge from this period of high costs stronger than ever.”
Merchants are increasingly tailoring return fees to their specific vertical, adjusting charges for bulky items like home goods while prioritizing low-friction customer experiences in competitive categories such as accessories. The report also notes the growing adoption of solutions like Checkout+, which enable shoppers to opt into return coverage at checkout, offering a path to cost recovery without creating customer friction.
Alexis Perlmutter, Head of Data at Loop, emphasized the strategic shift: “The best brands aren’t avoiding returns, they’re leveraging them to improve the P&L. Our State of Ecommerce Returns Report shows that when brands automate returns, incentivize exchanges, and think strategically about the entire customer experience, they retain more revenue and gain repeat customers. This is a clear moment of transformation in ecommerce operations, and it’s being led by brands that treat post-purchase like a growth engine.”
Key findings from the 2025 report include that 70.2% of merchants now charge return fees, an increase from 65% in 2024. Exchange rates saw notable increases, with jewelry up 30% year-over-year and intimates up 26% year-over-year. Cosmetics and personal care brands demonstrated the fastest return processing times and highest customer loyalty. Return rates varied significantly by vertical, with electronics decreasing by 28%, apparel increasing by 8%, home goods more than doubling with a 144% rise, and intimates showing a slight decline of 1%.
Amidst a year characterized by economic uncertainty and logistics volatility, the report concludes that flexible return policies, regional customization, and automated workflows are transforming returns from a cost center into a retention advantage. Loop operates as a commerce operations platform for Shopify brands, offering features such as Workflows, Instant Exchanges, Checkout+, and AI-powered tracking to streamline the customer journey, reduce friction, maximize revenue, and enhance customer lifetime value. The company has processed over 55 million returns and has helped merchants capture more than $2 billion in revenue over the past five years.
