Most returns come from overpricing, not underpricing. And it is not close.
Underpriced items sell fast, but they usually sell clean. Overpriced items sell slower, attract the wrong buyers, and generate more regret, scrutiny, and friction after delivery.
Here is why.
Underpricing sets buyer expectations low. When someone pays less than market, they subconsciously tolerate small flaws, cosmetic wear, or missing extras. The item feels like a win. That emotional buffer reduces return behavior.
Overpricing does the opposite. When buyers pay top dollar, they expect perfection even if the listing never promised it. Every scuff, noise, delay, or packaging issue gets magnified. The higher the price relative to comps, the narrower the margin for disappointment.
Returns cluster around expectation gaps, not defects.
Overpricing creates those gaps in several ways.
First, buyers slow down and overthink. A high price invites post-purchase analysis. The buyer starts re-reading the description, comparing other listings, and second-guessing the decision. That is when returns get initiated.
Second, overpricing attracts picky buyers. Bargain buyers complain less. Premium buyers complain more. They feel entitled to outcomes, not just items.
Third, overpricing increases buyer remorse. The more a buyer feels they stretched, the more likely they are to undo the decision once the item arrives.
Underpricing does cause returns occasionally, but usually for different reasons. Those returns tend to be defect-related, not expectation-related. The item truly did not work or was misdescribed. They are not emotional reversals.
Sellers often blame underpricing because the return feels unfair. In reality, the return would have happened at any price because the issue was functional or factual.
The dangerous misconception is thinking higher prices mean safer buyers. It is often the opposite.
A clean rule keeps this grounded:
Returns spike when price outruns tolerance.
If you want fewer returns, price where buyers feel relief, not pressure. A slightly faster sale at a slightly lower price usually beats a premium sale followed by a refund and wasted time.
Pricing is not just about profit. It is about expectation management.