Wear, return, repeat: How festive shoppers are hurting online sellers

Rishabh Jain runs a retail clothing store and is also a listed seller on online shopping platforms. For the last 6-7 years, he listed his catalogue of ethnic wear on online portals around the festive season, hoping to tap the demand for occasion wear. However, he shut the online business last year after suffering losses of ₹3-4 lakh, which he attributes largely to returned merchandise, including garments he says had clearly been worn.

Jain, who ran the online business under the name Mega Fashion, says more than 80 per cent of the products he sold were returned. The experience left him questioning whether a small seller could make online sales viable when so many garments came back in a condition that made them difficult to resell.

“Sometimes, customers order 10-12 items and return almost all of them. When the garments come back, you can often tell immediately that they have been worn. Some have sweat or perfume smells, some arrive without tags, and in other cases, customers wear the clothes with the tags still attached,” he told Business Standard.

The practice, known as wardrobing, involves buying a product, using it for a short period, and returning it as though it were unused. Allegations that shoppers are using festive outfits for Navratri, Garba and Dandiya celebrations before seeking refunds have brought the issue into focus, raising questions about the costs borne by small sellers and the safeguards available to them.

Recently, a video circulating on social media showed a delivery agent collecting a large number of return parcels following the Navratri and Dandiya season. The footage prompted speculation that shoppers had bought festive outfits, worn them for celebrations and subsequently returned them.

“The problem becomes worse during festivals because that is when demand for ethnic wear rises sharply. You invest in stock expecting sales, build inventory, but the returns can wipe out whatever you earn. The money invested in that inventory is tied up while the seller must continue paying other business expenses,” Jain said.

He has since shifted his focus to physical retail and wholesale.

Not every return amounts to misuse. Fashion is already a high-return category in ecommerce because customers cannot try on garments before buying them. Returns may result from sizing problems, differences between product images and the delivered item, defects or a change of mind where the policy permits it. 

Naveen Malpani, partner and consumer & retail leader at Grant Thornton Bharat, said industry observations suggest that 25-30 per cent of apparel purchased online may be returned this festive season.

The problem is particularly pronounced for occasion-specific clothing because the window for selling such products is limited. A garment returned after a festival may be difficult to sell at its original price, even if it is in good condition. If it comes back stained, damaged or without its original tags, its resale value could fall further.

By then, the seller may already have incurred shipping, handling and other marketplace-related costs. The extent of the loss depends on these charges, the original cost of the garment, its condition upon return and whether it can be sold again.

For small businesses operating on thin margins, the cost of returns extends beyond refunding the purchase price. Each return can involve additional shipping charges, time spent inspecting the product and potential losses if the merchandise cannot be resold. When returns occur frequently, these costs can quickly erode earnings from successful sales.

A sales executive at Aarco Aura, an ethnic-wear seller operating through Flipkart, Amazon and Meesho, said the business loses an estimated ₹100-120 on every returned order. According to the executive, the problem recurs during every festive season and has become one of the biggest challenges for small online sellers.

“On every return, we can lose around ₹100-120. When you are dealing with a large number of orders, these amounts add up quickly and put pressure on your margins. The problem is not just the individual return. It is the cumulative cost of handling repeated returns while trying to keep the business profitable,” the sales executive said.

The pressure is not limited to businesses selling directly through online marketplaces. It also affects manufacturers and wholesalers whose customers depend on e-commerce sales.

In East Delhi's Gandhi Nagar, a major market for women's ethnic wear, traders say repeated returns are making online sales increasingly difficult for smaller businesses. Manufacturers supplying garments to retailers and online sellers are also feeling the impact.

VS Fashion, a women's clothing manufacturer based in the market, said smaller businesses are particularly vulnerable because they have limited financial capacity to absorb repeated losses.

“This is a problem across the market, and small sellers are particularly vulnerable because they do not have the financial strength to absorb repeated returns. If a garment comes back in a condition in which it cannot be sold again, the loss becomes even bigger. For a small business, repeated losses of this kind can make online selling difficult to sustain. Among our retail customers, most have stopped selling only because of this reason,” the sales head at VS Fashion told Business Standard.

Jain said the problem was compounded by what he described as "inadequate support" from the online platform in dealing with disputed returns. According to him, complaints about garments returned in poor condition were often attributed to quality issues rather than possible misuse by customers.

“When we raise concerns, the platform's response was usually that customers are returning the products because there is something wrong with their quality. But when a customer orders 10 or 12 items and sends almost everything back, someone needs to examine what is actually happening,” he said.

He added that a high return rate may reflect sizing issues, inaccurate product descriptions or quality problems and treating every return as suspicious could penalise genuine customers, but failing to investigate clear signs of use could leave sellers bearing avoidable losses.

Grant Thornton's Malpani said the response should be targeted rather than a blanket tightening of return policies. Marketplaces can strengthen product-condition checks, identify repeated high-return behaviour and intervene when patterns indicate potential misuse, while protecting legitimate returns arising from fit, quality or fulfilment issues.

For sellers, he said, the priority should be to reduce avoidable returns, identify repeated misuse and strengthen protections against losses. That could include documenting product condition before dispatch, inspecting returned garments, maintaining records of missing tags or visible wear, and using dispute mechanisms to challenge deductions where evidence supports a claim.

However, such safeguards come at a cost. Inspecting every returned garment requires additional time and labour, while stricter verification procedures could delay refunds or create disputes with genuine customers. This makes evidence-based, proportionate and transparent return-management systems important for both sellers and buyers.

India's Consumer Protection (E-Commerce) Rules, 2020 establish obligations for e-commerce entities and sellers, including provisions relating to disclosures and consumer grievances. The framework protects consumers in cases involving defective, deficient or misrepresented products, subject to the applicable rules. The challenge is to ensure that legitimate consumer rights are protected without making small sellers responsible for losses arising from demonstrable misuse at the same time.

For small sellers, the concern is whether platforms can identify and address demonstrable misuse without restricting legitimate returns. As Jain's experience shows, when the cost of repeated returns outweighs the earnings from sales, the viability of an online business itself can come into question.