New research from Loop shows more than half of Australian shoppers have walked away from a brand over its returns policy, while retailers wrestle with what returns are really costing them
The way a brand handles returns has become one of the biggest tests of customer loyalty in Australian ecommerce, and new research suggests most retailers don’t realise it. More than half (55%) of Aussie online shoppers have walked away from a fashion brand, either by stopping shopping with it altogether or abandoning a purchase, because of the way it handles returns.
The findings, drawn from an independent study of 1,000 Australian consumers and 200 Australian retail decision-makers by ecommerce operations platform Loop, reveal how sharply the returns experience now shapes where Australians choose to spend, how far many retailers still are from recognising it, and why Australia is leading ahead of the US and UK in returns innovation.
While 55% of shoppers have already changed their behaviour over a returns policy, only 10% of Australian retailers name customer churn as the biggest financial impact of returns. Most are still focused on lost revenue (29%) and logistics costs (24%), suggesting many are managing the cost of returns while missing the customers those returns are costing them, causing a returns revenue gap.
Returns make or break a purchase decision
For Australian shoppers, the returns policy has become something to check before buying, not a fallback if something goes wrong. 85% of shoppers say they check a retailer's returns policy at least sometimes before making an online purchase, with one in three shoppers saying they check it every single time.
Return fees weigh heavily on that decision. The vast majority (91%) of Australian shoppers say return fees change how they shop online in some way. Half (50%) say fees make them more careful about what they buy, over a third (37%) shop less often with retailers that charge them, and more than a quarter (28%) say fees push them back into physical stores.
However, roughly one in five Australians (21%) said they would be willing to pay a small upfront fee in exchange for a more premium returns experience, giving retailers an opportunity to reduce customer churn due to return costs.
Australia leads in exchanges over refunds
Australian retailers are already moving faster than their overseas peers on the shift from refunds to retained revenue. They report the highest use of instant exchanges of any market in the study (53%, versus 50% in the US and 45% in the UK), and the lowest share of returns settled as cash refunds (42%, compared with 43% in the US and 53% in the UK).
Hannah Bravo, CEO of Loop, commented: "Shoppers are judging brands on what happens after the sale, and that judgment turns into action. Looking at the data, shoppers are saying that a bad returns policy has made them walk away from a brand, whereas many retailers still aren't recognizing or acknowledging this risk. This gap represents a significant opportunity for the brands that do see returns as a driver of growth, rather than a cost center."
She continued: "The ultimate outcome of a return experience is a major driver of customer retention, good or bad. A staggering 86% of Australian shoppers report a willingness to take an exchange under the right circumstances, and the value of that opportunity is eye-popping: over $2 billion globally to the brands Loop serves today."
The findings form part of Loop's latest research report, The Returns Revenue Gap, examining changing consumer and retailer attitudes towards the post-purchase experience and the growing role that returns, exchanges, tracking, refunds and customer communication play in shaping long-term retail loyalty.
Key findings
55% of Australian shoppers have stopped shopping with a fashion brand or abandoned a purchase because of its returns policy.
Only 10% of Australian retailers see customer churn as the biggest financial impact of returns, versus 29% who point to lost revenue.
91% of shoppers say return fees influence how they shop online in some way; 50% say fees make them more careful about what they buy.
57% of shoppers always or often check a retailer's returns policy before buying.
21% of Australian shoppers would pay a fee for a premium returns experience.
34% of shoppers would try new brands, and 32% would buy more, if they had greater confidence in a retailer's returns policy.
68% of Australian retailers agree the returns experience significantly affects customer loyalty.
53% of Australian retailers use instant exchanges (the highest of any market studied); refunds account for just 42% of returns (the lowest).
Methodology
The independent research was conducted online by Sapio Research on behalf of Loop between May and June 2026. The study surveyed 1,000 AU consumers who had made an online return in the previous six months and 200 AU retail decision-makers responsible for ecommerce returns strategies.
*Loop applied the 87% of consumers who told us (via our Sapio-commissioned survey) they would take an exchange under the right conditions, to the actual refund in dollars, Loop merchants issued over the past 12 months in each region, showing how much of what is currently paid out as cash refunds, could instead stay in the merchant's business as retained revenue.