A benchmark study launching today has revealed the most comprehensive global analysis of returns and exchanges, based on 13.8 million returns from 4,000+ Shopify merchants across the UK, US, Australia, New Zealand, and Europe.
Loop Returns, the leading returns management and post-purchase platform for Shopify merchants, today released its 2025 State of Ecommerce Returns Report. The findings show that while returns are a universal pain point, the impact in the UK is particularly stark, with brands leaving revenue and loyalty on the table by not prioritising exchanges within their returns strategies.
With an almost 1 in 5 return rate (17.5%), the UK is nearly double that of the US (11%) and Australia (10.9%). UK merchants also see a refund ratio of 78.1%, meaning the vast majority of returned value exits the brand entirely. In fact, exchange adoption in the UK sits at just 5.8%, the lowest of any region, compared to 17.1% in the US and 13.2% in Australia. This results in revenue retention rates of only 21.9%, versus 23.9% in the US and 45% in Australia,
underscoring how UK merchants are losing long-term customer loyalty.
underscoring how UK merchants are losing long-term customer loyalty.
The cost of returns in the UK also weighs heavily on margins, even though average returns costs are relatively low at £5.70 ($7.05), leaving brands to absorb the majority of costs. Around two-thirds (66.1%) of merchants now charge return fees and rather than hurting customer loyalty, this move appears to be working.
“Ecommerce is changing quickly, and customers are gravitating towards the brands who ‘get them’. These brands are gathering data and using it to operate in a smarter way. They’re proactively sharing recommendations to their customers, automating the return and exchange process, and making customer service more seamless,” said John-David Klausner, GM International at Loop.
He continued, “The numbers in this report show the incredible revenue opportunities for brands that invest in the “boring” parts of their ecommerce businesses, which are really the parts that customers notice the most.”
Brands risk falling behind without return strategies that prioritise retention
The report highlights the wider context for ecommerce in 2025, with tariff shocks, inflation, and rising customer expectations forcing brands to rethink every part of the post-purchase journey.
In this environment, UK merchants in particular face an urgent need to shift from refund-heavy policies to exchange-first strategies that retain customers and build loyalty.
Globally, the report shows that merchants embracing smarter returns management are already reaping the rewards by using returns data to inform product development and better marketing strategies. On average, brands can retain up to £100,000 in revenue each year by optimising their returns operations. In 2025 alone, Loop merchants collectively retained over £381.7 million in revenue through post-purchase improvements including shrinking return windows, customising returns policies and encouraging exchanges.
As brands navigate macroeconomic volatility and growing consumer scrutiny, the report underlines that post-purchase excellence is now a core competitive differentiator and not just an operational necessity.
UK returns stats at a glance (2025)
- Return rate: 17.5% — the highest comparably to US 11% and Australia 10.9%
- Refund ratio: 78.1% in UK — the majority of returned value leaves the brand. In US it is
- 76.1% and Australia it is 55%
- Exchange adoption: 5.8% — lowest globally (vs 17.1% US, 13.2% Australia)
- Revenue retention rate: 21.9% — behind US (23.9%) and Australia (45%)
- Merchants charging return fees: 66.1% of UK, 70.2% of US and 73.1% of Australian merchants charge fees
- Average return fee: UK average return fee is £5.70 ($7.05), US average return fee is $9.41 and Australian average return fee is $7.77
Return processing times:
- 9.97 days from initiation to processed
- 3.96 days to in-transit
- 6.31 days to final delivery
