The Hidden Cost of Returns

Fashion e-commerce has never been bigger, but behind every sale hides a costly risk: the return. What feels like healthy growth on the top line can collapse once returns are factored in. Industry data shows that fashion retailers lose €15-25 for every returned item, with return rates regularly reaching 25-30%. The common assumption is that sizing is to blame. But the truth is more uncomfortable—most returns happen even when the fit is right. Understanding why is the first step toward stopping the drain.

Returns That Drain Profit

Every retailer knows the feeling: the return notification that turns a win into a loss. Then another, and another. By the end of the month, one in four sales has come back, each costing around €20 to process. The impact on margins is brutal, and the cycle repeats month after month.

Our analysis of thousands of return reasons shows that the majority have little to do with fit. In fact, only a small fraction are size-related. The breakdown is clear:

That means 73% of returns happen even when the garment technically fits. The dress hugs perfectly but the silhouette misfires. The sweater's shade clashes with skin tone. The customer's style sense shifts once they see themselves in the mirror.

The Real Cost of Wrong Choices

For a fashion store doing €200,000 in monthly sales, a 25% return rate wipes out €50,000 in merchandise, adds €12,500 in processing costs, and drains another €30,000 in lost lifetime value from disappointed customers. The total monthly impact is €92,500 - nearly half of revenue erased.

Merchants often turn to familiar fixes - size charts, detailed reviews, virtual try-on tools, or style quizzes - but these only touch the 9% of returns caused by sizing. The structural issue remains untouched.

Why Sizing Isn't the Problem

Fashion retail continues to assume that showing every shopper the full catalog is a winning strategy. In reality, it forces customers to gamble on what might suit them. They guess wrong three times out of ten, and each wrong guess leads to a costly return and a hit to trust. This is not a customer service problem, nor a quality control issue. It is the direct result of presenting the wrong products to the wrong people.

Prevention, Not Damage Control

Instead of minimizing returns after the fact, the solution lies in preventing them before they happen. When shoppers are only shown products that align with their body morphology and natural coloring, return rates drop dramatically. In our pilot data, we see:

This shift doesn't require gimmicks or more friction in the buying process. It requires precision in matching products to people.

Returns are not inevitable. They are the predictable outcome of a system that asks customers to self-diagnose what will suit them. Merchants don't need another band-aid in the form of size charts or AR try-ons. They need a system that ensures every item shown is a genuine option for that individual. That is the difference between fighting fires and preventing them from starting at all.