The usual view is that a customer who returns a lot is a cost to be managed. The research says that’s incomplete, and sometimes backward: returners are often your most engaged buyers.

Returns up to a point: Petersen and Kumar

J. Andrew Petersen and V. Kumar studied individual customers’ buying and returning over several years. Their 2009 paper in the Journal of Marketing concluded that returns are “inevitable but by no means evil”: they are part of the buying relationship, and up to a threshold, allowing them raises profit Published. Their 2010 article for MIT Sloan Management Review makes the same case for managers: a lenient policy, managed well, can earn more than a strict one Published.

Read it as a curve with a peak. Choke returns off and you lose the purchases the safety net made possible; let them run and the cost overwhelms the benefit. The peak is not near zero. Their 2015 paper in the Journal of Marketing Research reports a six-month field experiment with 26,000 customers of an online retailer, in which accounting for the risk-reducing effect of returns raised both short- and long-term profit Published.

Fees and free returns: Bower and Maxham

Amanda Bower and James Maxham followed customers of two online retailers over 49 months, combining two surveys with actual spending. Customers who paid for their return shipping cut their spending with the retailer by 75% to 100% over the next two years. Customers whose return was free spent 158% to 457% of their pre-return level Published. The retailers charged for return shipping when they judged the customer to be at fault.

So the customers who paid weren’t a random group; they were the ones the retailer blamed, and some of the gap is who they were. What survives is the direction, and the mechanism the authors point to: regret over paying for a return was the strongest predictor of whether a customer bought again Published.

Speed and the returns process

Stanley Griffis and colleagues used an online retailer’s order and return records and found that customers who had a return went on to buy more often, bought more items per order and bought higher-value items. The faster their refund was processed, the larger the increase Published. That’s an association, not an experiment, but it’s consistent with the others, and it’s the reason chapter 8 exists.

People who run returns for large retailers say the same thing in plainer words. Amena Ali, chief executive of Optoro, a returns technology company, told the Associated Press in 2024 that “your most profitable customers tend to be high returners” Reported.

Customers who return are often the ones who buy the most. A policy built to punish returns punishes them first.

What the research doesn’t say

• It doesn’t say returns cause loyalty. Heavy buyers return more because they buy more, so much of the link is selection. The few field experiments are the strongest evidence that policy itself matters.
• It doesn’t say more is always better. The curve has a peak.
• It doesn’t tell you your number. Each study is one or two retailers in one era, which is why this guide keeps asking for a holdout.

Do this

• Pull every customer whose first order was 12 to 24 months ago. Split them into those who returned something from their first order and those who didn’t, and within each, by first-order value band. Compare contribution over the following twelve months. If returners are worth more at the same first-order value, your policy is protecting your best customers, and every tightening needs a test.