Fashion shoppers aren’t willing to put up with poor returns policies, with more than half abandoning a purchase or a brand because of the experience, according to new research from Loop.

The study found that 55 per cent of Australian online shoppers have changed their buying behaviour because of a fashion retailer’s returns policy. Yet only 10 per cent of Australian retailers identified customer churn as the highest financial cost of returns.

Instead, retailers were more likely to cite lost revenue (29 per cent) and logistics costs (24 per cent), indicating many are focused on the immediate costs of returns rather than the long-term impact on customer retention.

The findings are published in Loop’s latest report, The Returns Revenue Gap, based on an independent survey of 1000 Australian consumers and 200 retail decision-makers.

Returns policies are becoming a bigger factor in online purchase decisions. Eighty-five per cent of shoppers said they check a retailer’s returns policy at least sometimes before buying online, including one in three who review it every time.

Return fees are also influencing shopping behaviour, with 91 per cent of respondents saying the charges affect how they shop online. Half said the fees make them more cautious about what they buy, while 37 per cent shop less frequently with retailers that charge for returns. Another 28 per cent said return fees encourage them to shop in-store instead.

The research also suggests shoppers may be willing to pay for a better returns experience, with 21 per cent saying they would pay a small upfront fee for a premium service.

Companies are already leaning towards exchanges as an alternative to refunds, with 53 per cent offering instant exchanges – the highest adoption rate among the markets surveyed.

“Shoppers are judging brands on what happens after the sale, and that judgment turns into action,” said Hannah Bravo, CEO of Loop.

“The data shows shoppers are walking away from brands because of poor returns experiences, while many retailers still aren’t recognising or acknowledging that risk. That gap represents a significant opportunity for brands that view returns as a driver of growth rather than simply a cost centre.”

Bravo said exchanges can also help retailers retain customers after a return.

“The outcome of a return experience is a major driver of customer retention, good or bad,” she concluded.

• Further reading: How Australians rethink grocery shopping amid food inflation.