New research from Cashew Research suggests return policies are influencing purchasing decisions earlier in the buying process, with nearly half of consumers hesitating to complete transactions when return shipping is not free.
The Calgary-based firm said its latest report, Data Drop: The Returns Revolt, is based on a survey of 2,000 consumers across Canada and the United States. The findings indicate that return policies are affecting conversion rates and repeat purchasing behaviour before customers reach checkout.
The report characterizes returns as a factor shaping demand and customer trust, rather than solely a post-purchase operational cost.
“CMOs are optimizing ads and checkout flows while ignoring one of the biggest trust signals in commerce,” said Addy Graves, CEO of Cashew. “Returns don’t just impact margins after the sale. They determine whether the sale happens at all.”
According to the survey, 47 per cent of consumers say they hesitate to purchase when return shipping is not free. The report states that this hesitation can reduce repeat purchases and long-term loyalty.
Cashew’s findings suggest return policies can influence whether a customer proceeds with a transaction, regardless of product category or price.
The survey also found that one in four purchases fails because products do not meet expectations. In apparel specifically, 74 per cent of returns are attributed to fit.
The report indicates that static size charts and generic product visuals may no longer meet shopper expectations, with consumers seeking more detailed sizing guidance before completing purchases. More than half of respondents said they would not complete a purchase without detailed sizing visuals or guidance.
In addition, 35 per cent of shoppers reported adding items to their cart with the expectation that they would return them.
The data challenges assumptions about which demographic groups drive return rates. Cashew found that shoppers over the age of 45 account for more than half of all returns, with consumers aged 65 and older representing the largest segment.
“High return rates aren’t about bad customers,” Graves says. “They’re signals that experiences weren’t designed for the people driving the most revenue.”
The report suggests that return-related friction and product fit concerns may disproportionately affect older consumers.
Cashew’s report frames returns strategy as directly connected to revenue growth and customer retention. It states that brands that reduce friction in the returns process, invest in improved sizing guidance and design experiences for multi-generational shoppers can influence conversion and long-term loyalty.
Cashew Research describes itself as a market research solution that delivers real-time data collected from consumers to help brands understand purchasing behaviour and inform product and strategy decisions.
Returns can drive conversions and revenue
Graves said retailers are underestimating the role returns play in driving conversions and revenue.
“In our study, 47% of shoppers said return policies directly influence whether they complete a purchase at all. We don’t see this as a post- purchase operational issue, we see this as a conversion driver,” she said.
“What this tells us is that returns aren’t just a cost centre. They function as a trust signal as well. When policies are clear, flexible, and low- friction, shoppers feel more confident about clicking “buy.”
“Retailers who frame returns purely as a margin problem may be overlooking the revenue impact on the front end of the funnel.”
Some comments from consumers:
“Spent 40 minutes on chat only to be told I needed to call instead – then waited another 30 minutes on hold.”
“Had to dig through fine print to find out electronics have different return rules – not mentioned during checkout.”
Retailers need to make returns efficient but not punitive
When shoppers can’t try before they buy, they hedge their bets. Over a third reported adding items to their cart with the expectation that they may return at least one item. They are doing this to reduce risks, said Graves.
The implication, she explained, for retailers is:
● First, invest in tools that reduce uncertainty upfront (better sizing guidance, reviews, fit visualization, AR, etc.).
● Second, make returns efficient but not punitive.
“The brands that win aren’t eliminating returns altogether, they’re reducing unnecessary returns while maintaining trust.
“In our data, shoppers 45+ accounted for half of total returns, with 65+ over-indexing relative to their share of purchases,” said Graves.
“There are a few likely drivers:
● Greater purchasing power and frequency
● Lower tolerance for product mismatch
● Less comfort with ambiguous sizing or product descriptions
● A stronger expectation of customer service
“This demographic also tends to value clarity and fairness. For retailers, that means policies must be extremely transparent and easy to navigate, especially offline or via assisted channels.
“Ironically, tightening return policies in a way that feels restrictive could disproportionately alienate a high-value customer segment.”
With retailers under margin pressure, many are tightening return policies. Could that strategy backfire?
“It depends how it’s done, but yes, there’s real risk,” said Graves. “When we asked shoppers how they would respond to stricter return policies (e.g., shorter windows, restocking fees, paid returns), 69% said they avoid brands with restrictive return policies. Returns may be expensive, but lost customers are more expensive.
“The data suggests the smarter strategy here is segmentation:
● Identify serial returners vs. occasional returners
● Personalize policies based on behaviour
● Improve product accuracy to prevent returns in the first place
“Cutting flexibility across the board may protect short-term margins but it could erode lifetime value.”
What outdated return policies look like
She outlined what an outdated return policy looks lie in 2026:
● Hidden fees or unclear conditions
● Short return windows without justification
● Store credit only without clear communication
● Friction-heavy processes that require printing, forms, or long wait times
Leading brands, added Graves, are doing the opposite:
● Offering transparent, easy-to-understand policies
● Integrating digital tracking and seamless return portals
● Using data to proactively reduce return risk (fit tools, AI sizing, better product content)
● Viewing returns as part of the overall customer experience, not just a logistics headache
“The shift we’re seeing is that returns are becoming a strategic lever to stand out, build trust and keep customers over time.”
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