WASHINGTON — Consumers returned an estimated $428 billion in merchandise to retailers last year, approximately 10.6 percent of total U.S. retail sales in 2020. Of those returns, roughly 5.9 percent were fraudulent, equating to $25.3 billion, according to a report released today by the National Retail Federation and Appriss Retail.
“Last year, we saw an increase in returns of online purchases as the pandemic forced more consumers to shop online,” said Mark Mathews, NRF’s vice president of research development and industry analysis. “Retailers view the return process as an opportunity to further engage with customers, as it provides additional points of contact for retailers to enhance the overall consumer experience.”
“Retailers view the return process as an opportunity to further engage with customers, as it provides additional points of contact for retailers to enhance the overall consumer experience."
While the total rate of returns is in line with recent years, online returns more than doubled in 2020 from 2019 and are a major driver of the overall growth of returns. In 2020, ecommerce accounted for $565 billion or 14 percent of total U.S. retail sales. Approximately $102 billion of merchandise purchased online was returned, with $7.7 billion (7.5 percent) labeled as fraudulent.
The survey found that for every $1 billion in sales, the average retailer incurs $106 million in merchandise returns. Additionally, for every $100 in returned merchandise accepted, retailers lose $5.90 to return fraud. The top categories of merchandise returned include auto parts (19.4 percent), apparel (12.2 percent), home improvement (11.5 percent) and housewares (11.5 percent). More than one-fifth of returns were completed through credit cards, followed by cash (12.7 percent) and debit cards (7 percent).
NRF’s holiday forecast predicted a 3.6 percent to 5.2 percent growth over the 2019 holiday season to a total between $755.3 billion and $766.7 billion. On average, retailers expect 13.3 percent of merchandise sold during the 2020 holiday season to be returned. The estimated cost of these holiday returns is $101 billion. More than one-third of respondents indicated they planned to hire additional staff to handle returns over the holidays. The vast majority expect to see the bulk of returns during the month of January.
The survey of 62 retailers was conducted by NRF and Appriss Retail October 19 – November 2, 2020. Click here to view the survey results.
About NRF
The National Retail Federation, the world’s largest retail trade association, passionately advocates for the people, brands, policies and ideas that help retail thrive. From its headquarters in Washington, D.C., NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $3.9 trillion to annual GDP and supporting one in four U.S. jobs — 52 million working Americans. For over a century, NRF has been a voice for every retailer and every retail job, educating, inspiring and communicating the powerful impact retail has on local communities and global economies. NRF.com
About Appriss Retail
Appriss Retail, a division of Appriss Inc., provides artificial intelligence-based solutions to help retailers protect margin, unlock sales, and cut shrink. With more than 20 years of retail data science expertise, the company’s Software-as-a-Service (SaaS) platform generates advanced analytical insights and real-time decisions that drive action throughout the organization, including operations, finance, marketing, and loss prevention. Its performance-improvement solutions yield measurable results with significant return on investment among retail store, ecommerce, and inventory functions. Appriss Retail serves a global base of leading specialty, apparel, department store, hard goods, big box, grocery, pharmacy, and hospitality businesses in more than 150,000 locations (brick and mortar and online) in 45 countries across six continents. For more information about Appriss Retail, visit https://apprissretail.com/.