Consumers consider many factors before purchasing products online. One important one you may not consider is flexible returns, a make-or-break factor for e-commerce customers.
Data from the recently released second annual FedEx Returns Survey shows that consumer expectations for returns have evolved, with preferences varying significantly by generation and income level.
The findings reveal that Gen Z and millennials want options other than in-store returns, while higher-income earners and boomers prefer in-store returns, underscoring the importance of offering options to meet these differing needs.
Return policies are essential for shopping decisions. Two-thirds of consumers review return policies before purchasing, and 36% of millennials say that a retailer’s return policy frequently or sometimes influences their purchasing decisions. Transparent and flexible policies can significantly enhance customer loyalty and conversion rates.
I talked to Jason Brenner, senior vice president of digital portfolio at FedEx, to learn more about how your returns policy can impact your online sales.
Rieva Lesonsky: How have consumer expectations for return policies changed recently, and what’s driving this shift?
Jason Brenner: Consumers now expect more flexibility, convenience, and speed in returns policies. They want multiple returns options such as in-store, drop-off, and home pickup, along with fast processing and clear, transparent communication updates. This evolution is driven by e-commerce growth, increased competition, and the preferences of the younger, digital-first generations for expediency. In turn, retailers that offer hassle-free returns often see stronger customer loyalty and higher conversion rates.
Lesonsky: The survey shows a generational divide in return preferences. Why do you think Gen Z and millennials are pushing for alternative return options like home pickup and mailbox drop-offs?
Brenner: The FedEx Returns Survey shows that Gen Z and millennials prioritize convenience and efficiency, having grown up with on-demand services like food delivery and ridesharing. Our survey indicates that 20% of Gen Z and millennials opt for home pickup for returns, with 19% of millennials also choosing mailbox drop-offs. Home pickup and mailbox drop-offs eliminate the need for store visits, aligning with their mobile-first lifestyle. But 59% of boomers prefer to return items to the store where they were purchased for in-person engagement to help confirm their return has been processed.
Lesonsky: With two-thirds of consumers reviewing return policies before making a purchase, what are the key elements of a return policy that drive conversion and customer loyalty?
Brenner: A returns policy that boosts conversions and loyalty should be easy to find and understand, with clear language across the different points of consumer interaction, such as checkout pages, email order updates, and receipts. Flexibility is also crucial, especially for retailers with businesses aimed towards younger generations. Retailers should offer multiple options to suit different preferences, ranging from in-store to no-label / no-box returns services. No-label / no-box returns shipping allows shoppers to take items to specified drop-off locations and consumer respondents overwhelmingly perceive this option as easy and convenient.
Lesonsky: How can retailers leverage flexible return policies as a competitive advantage in today’s e-commerce landscape?
Brenner: Shoppers today expect the post-purchase experience to be as delightful as the initial purchase. A flexible returns policy reduces purchase hesitation and builds brand trust. Retailers can highlight return-friendly policies in marketing campaigns, product pages, and at checkout to reassure customers. Offering instant exchanges, extended returns windows, or VIP returns perks for loyal customers can help strengthen positive brand perception.
Lesonsky: How can small businesses compete with larger retailers when offering flexible return options?
Brenner: The FedEx Returns Survey data highlights just how much returns policies impact consumer behavior. Our data confirmed that consumers’ confidence levels translate to their purchasing habits. Shoppers are looking for a returns process as convenient as the initial purchase.
The expectation is the same for small and large retailers. Small businesses can adopt strategies similar to those of large and big-box retailers regarding their return policies. They can partner with logistics providers to build a robust returns infrastructure that includes easy and free returns and exchanges.
Providing frequent customer perks through a loyalty program can also help small businesses build a loyal customer base.
Lesonsky: How is FedEx adapting to the increasing demand for flexible return options?
Brenner: FedEx continues to expand its drop-off network, providing more returns locations, including FedEx Office, Walgreens, and partner retailers. We are also investing in digital returns processing, QR code-based returns, and consolidated returns solutions. Promoting no-label / no-box returns aligns with growing consumer demand for flexible returns options. In fact, this option has been gaining traction among consumers. Our Returns Survey indicates that consumer respondents perceive the offering to be both easy (71%) and convenient (69%). As a response, we are continuing to invest in these solutions to evolve with consumer needs and preferences.
Lesonsky: Looking ahead, how do you see return policies evolving to meet consumer expectations?
Brenner: Returns policies will continue to prioritize automation, sustainability, and personalization. AI-driven systems will enhance eligibility checks, offer instant approvals, and suggest exchanges over refunds. More retailers will adopt packaging-free, label-free returns and encourage in-store drop-offs to reduce environmental impact. Subscription-based perks, such as premium returns benefits for loyalty program members, may also become more common.
One retailer surveyed said they planned to use “automated tracking systems, predictive analytics for delivery estimates, and AI-driven chatbots for return processing and customer support.” Real-time refunds via instant digital payments or store credit will further enhance trust and convenience. Retailers that balance flexibility with cost efficiency while aligning with consumer expectations will maintain a competitive edge.
Rieva Lesonsky is President of Small Business Currents, LLC, a content company focusing on small businesses and entrepreneurship. While you can still find her on Twitter @Rieva, you can also reach her @Rieva.bsky.social and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
