Dive Brief:
- Surpassing last year’s numbers, the National Retail Federation predicts that shoppers will return $890 billion worth of merchandise this year, comprising 16.9% of retailers’ annual sales, according to a report released by the NRF and Happy Returns, a UPS subsidiary.
- Of the 2,007 people surveyed between August and September, 76% of respondents said they factor free returns into their shopping decisions, and 67% said a negative returns experience would dissuade them from shopping with a retailer in the future, according to the report.
- More than half (51%) of Gen Z shoppers said they had bought multiple items with the intent to return some of them, a practice known as bracketing, the report said.
Dive Insight:
The NRF’s projection signals that returns could be an even bigger hassle for retailers this year. Last year, retailers accepted $743 billion in returns, and they lost $101 billion in returns fraud, according to the NRF.
The NRF’s report indicates that retailers are trying to improve the returns experience despite the headaches stemming from it. Most (93%) of retail respondents said fraud and other exploitative behavior is a substantial problem for their company. Still, more than two-thirds (68%) of retailers said they are focusing on enhancing their returns capabilities over the next six months.
“Return policies are no longer just a post-purchase consideration – they’re shaping how younger generations shop from the start,” David Sobie, co-founder and CEO of Happy Returns, said in a statement. “With behaviors like bracketing and rising return rates putting strain on traditional systems, retailers need to rethink reverse logistics.”
Other research also suggests retailers’ return policies are becoming critical to attracting shoppers. Eighty-two percent of shoppers said a retailer’s return policy sways their purchasing decision, according to ICSC.
Returns can also come at a great cost to retailers. A Narvar survey released in August found that almost four in 10 shoppers return an item they purchased online at least once per month, and 52% said they had submitted at least one fraudulent return in their lifetime. Narvar’s survey also found that the shipping, customer support calls, product damage and other costs add up to between $25 and $30 to process each return.
As a result, retailers are employing a variety of methods to address returns. In August, Amazon introduced a program that lets merchants using its fulfillment services issue product refunds without customers returning their purchases, an effort aimed at reducing costs for sellers. REI, on the other hand, confirmed to Retail Dive last month that it will no longer accept returns from a small group of members who have repeatedly misused its return policies.
Correction: A previous version of this headline incorrectly stated the projected number of returns. The NRF projects $890 billion in returns in 2024.
