What: Notre Dame study demonstrates how "returnless returns" transform transactional relationships into personal ones, driving customer loyalty through psychological principles of reciprocity and trust.

Why it is important:

As retailers face an $890 billion returns challenge, this research provides a psychological framework for transforming a major cost center into a strategic advantage for building lasting customer relationships.

New research from the University of Notre Dame reveals that allowing customers to keep unwanted items instead of returning them creates a powerful psychological shift in brand perception. The study, published in the Journal of Marketing Research, demonstrates that "returnless returns" significantly boost customer loyalty and repurchase intentions by transforming transactional relationships into more personal ones. This practice has gained substantial traction, with 59% of major retailers now implementing this approach, more than doubling from the previous year. The research shows that trust plays a crucial role, as requiring proof of defects diminishes the positive effects. When companies demonstrate trust by not requiring documentation, customers respond with dramatically increased loyalty and advocacy. The study also found that framing these policies on a case-by-case basis proves more effective, as customers feel they're receiving special treatment. Additionally, suggesting donation options for unwanted items further enhances brand perception and trustworthiness compared to recommending disposal.

IADS Notes: The Notre Dame study's findings on returnless returns align with significant industry developments throughout 2024-2025. While the NRF reported an unprecedented $890 billion in returns by December 2024, retailers are actively seeking innovative solutions to balance customer loyalty with financial sustainability. Decathlon Hong Kong's successful implementation of a lifetime returns policy in August 2024 demonstrated how trust-based approaches can strengthen customer relationships without compromising profitability. This contrasts with the industry-wide challenge revealed in September 2024, where 39% of consumers were returning online purchases monthly, each return costing retailers $25-30. The trend has prompted varied responses, from Chinese e-commerce platforms ending refund-without-returns policies in April 2025 to retailers exploring circular economy approaches. These developments underscore the study's central thesis that returns management can be transformed from a cost center into a strategic tool for building customer loyalty.

Why letting customers keep their returns creates loyalty