Retail returns reached 14.5% of U.S. sales, costing $743B, with fraud at $101B. Rising habits like "bracketing" and "wardrobing" strain retailers and sustainability.
In 2023, U.S. retailers faced $743B in returns, accounting for 14.5% of the $5.13T in total retail sales. Online purchases had a return rate of 17.3%, much higher than the 10% for in-store sales, according to NRF. Fraudulent returns alone cost $101B, or 13.7% of total returns. January, often called "Returnuary," sees a surge in holiday returns, adding unpredictability to profits. Many returned items are unsellable or heavily discounted, hitting retailers’ bottom lines. This trend has worsened since 2012, when returns were only 8.8% of sales.
Consumer behavior is fueling the returns crisis. About 66% of shoppers engage in "bracketing," buying items in multiple sizes or colors and returning what they don’t want, per Happy Returns. Another 70% practice "wardrobing," returning items after a single use, according to Optoro. While some retailers tighten policies—81% have shortened return windows or added fees—this creates a dilemma. Shoppers expect free returns, with 75% saying stricter rules discourage them from buying. Returns also harm sustainability, as many products end up in landfills and generate carbon emissions during processing.
Are consumer habits like bracketing hurting retailers more than fraud?
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