
Towards sustainable e-commerce: UNCTAD recommendations (part 2)
Reducing return rates with technological solutions
The rapid growth of e-commerce has been accompanied by a rise in product returns, the rates of which tend to be much higher for online shopping than for in-store purchases, the latest UNCTAD report on the digital economy points out.
Environmental impact of returns
Nowadays, returns are a standard aspect of retail, often safeguarded by consumer protection laws worldwide. However, the return process poses serious environmental challenges. These are due to the use and choice of return packaging and labelling, reconditioning, storing as well as additional transportation required to pick up, sort, repack and redistribute products, especially if return centers are far away from the customer’s location.
In addition, many returned products frequently end up as waste, despite being new. High costs of restocking and refurbishing often make it uneconomical to return these products to the sales cycle, resulting in their discarding or even destruction.

A global view of returns
Evidence suggests that online shopping fuels higher return rates compared to traditional retail. For instance, according to the National Retail Federation (NRF), in the U.S., online returns reached 17.6% in 2023. In contrast, the return rate for brick-and-mortar purchases was significantly lower at 10.02%, excluding instances where online orders are returned in-store (often termed as BORIS – Buy Online, Return In-Store).
In Europe, Switzerland had the highest return rate per online buyer in 2023, at 62%, according to the Statista Consumer Insights survey. Germany closely followed with 55%, and the United Kingdom completed this podium with 54% of returned products. In France and Spain, this rate was slightly lower, at 46% and 44%, respectively.
Technology for reducing returns
Digital tools can help e-commerce businesses manage and minimize returns. In this regard, UNCTAD recommends two key actions:
- Detailed product information: Providing customers with more comprehensive and precise information about a product, including color, weight, size, and other pertinent dimensions.
- Consistency between the presentation of the product and its actual appearance: Ensuring that images and descriptions accurately reflect the real product minimizes returns due to unmet expectations.
In line with the second recommendation, Augmented Reality (AR) is emerging as a breakthrough technology that can significantly reduce return rates. By empowering virtual try-ons, spatial planning, product visualization, and measurement assistance apps, AR enhances the user experience and allows for immersive virtual environments.
A market survey conducted among over 4,000 shoppers across France, Saudi Arabia, the United Kingdom, and the United States revealed that around two-thirds of consumers who used AR technology were less likely to return their purchases.

Beyond UNCTAD’s recommendations, there are other technological solutions that can help minimize returns. As a company specializing in e-commerce technology, we recommend the following strategies, among others:
- Using automated and intelligent digital solutions to manage returns and streamline logistics and storage processes. For example, by optimizing reverse logistics, businesses can minimize waste and improve efficiency.
- Collecting and analyzing data on returns helps businesses identify trends and areas for improvement. For example, understanding which products have higher return rates can guide better product descriptions or adjustments in product offerings.
- Leveraging data and AI/ML for CX personalization. For example, by offering customers more relevant product recommendations, companies can increase the likelihood of product satisfaction and minimize returns caused by poor purchase decisions.

Looking for more practical ways to reduce returns and cut costs in e-commerce using digital technologies? Discover key strategies in our blog article.
Conclusion
E-commerce is often perceived as a virtual space, but its environmental impact is anything but intangible. While the act of purchasing may take place in a digital realm, the consequences of returns and the logistics that follow are very real and material. As UNCTAD emphasizes, the path to sustainable e-commerce requires concerted action by companies, governments, and consumers. From curbing free returns to adopting fair use policies and employing digital tools, the industry has several levers to pull. Ultimately, the goal is clear: to reduce the environmental impact of returns and enable more informed, conscious consumer choices in the online shopping sphere.