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How retailers are navigating a busy returns season

Numbers Game: The numbers you need to know.
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Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.

We’re just about wrapping up the returns season, which is one of the aspects of holiday shopping retailers want to minimize the most. For 2023, total returns amounted to $743 billion in merchandise or a total return rate of 14.5% of sales, according to an end-of-year-report from the National Retail Federation and Appriss Retail.

  • The report found that the average retailer would take on $145 million in return costs for every $1 billion in sales.
  • Also, the return rate was much higher for online sales, which saw a 17.6% return rate as opposed to a 10% rate for brick and mortar.

“Retailers continue to test and implement new ways to minimize losses from returns, particularly those that are fraudulent, while at the same time optimizing the shopping experience for their customers,” Mark Mathews, NRF’s executive director of research, said in a statement.

Retailers want to reduce returns as a way to avoid fraudulent returns, which accounted for $101 billion in losses last year for retailers. That translates to the average retailer losing $13.70 in return fraud for every $100 returned in product.

  • Almost half of retailers surveyed in the report (49%) said they identified returns of used, non-defective products, which is known as wardrobing. Another 44% cited the return of already stolen products, and more than a third (37%) said they had received returned merchandise that was purchased with fake money.
  • NRF said retailers are taking a number of steps to mitigate fraudulent returns moving forward.

“Retailers’ efforts include providing greater detailed descriptions on sizing and fit of products for online purchases and requiring a receipt with returned items,” Mathews said. “As a whole, the industry is prioritizing efforts to reduce the amount of merchandise returned in stores and online.”

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.

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