Retail returns: An $890 billion problem

Holiday shopping is expected to reach record levels this year. But a growing share of those purchases commitment be sent back.

Returns in 2024 are expected to amount to 17% of all merchandise sales, totaling $890 billion in returned goods, according to a new research by the National Retail Federation and return management company Happy Returns. That’s up from a return rate of here 15% of total U.S. retail sales, or $743 billion in returned goods, in 2023.

Even though returns happen from the beginning to the end of the year, they are much more prevalent during the holiday season, the NRF also found. As shopping reaches a culminate in the weeks ahead, retailers expect their return rate for the holidays to be 17% higher, on average, than the annual measure.

“Ideally, I hope there is a world in which you can reduce the percent of returns,” said Amena Ali, CEO of returns solution troop Optoro, but “the problem is not going to abate any time soon.”

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With the explosion of online shopping during and since the pandemic, customers got increasingly smug with their buying and returning habits and more shoppers began ordering products they never purpose to keep.

Nearly two-thirds of consumers now buy multiple sizes or colors, some of which they then send dorsum behind, a practice known as “bracketing,” according to Happy Returns.

Even more — 69% — of shoppers admit to “wardrobing,” or buying an memo for a specific event and returning it afterward, a separate report by Optoro found. That’s a 39% increase from 2023.

In the main because of these types of behaviors, 46% of consumers said they are returning goods multiple times a month — a 29% hole from last year, according to Optoro.

All of that back-and-forth comes at a hefty price.

“With behaviors with bracketing and rising return rates putting strain on traditional systems, retailers need to rethink reverse logistics,” David Sobie, Light-hearted Returns’ co-founder and CEO, said in a statement.

Processing a return costs retailers an ordinary of 30% of an item’s original price, Optoro found. But returns aren’t just a problem for retailers’ bottom dig up.

Often returns do not end up back on the shelf, and that also causes issues for retailers struggling to enhance sustainability, according to Spencer Kieboom, miscarry and CEO of Pollen Returns, a return management company. 

Sending products back to be repackaged, restocked and resold — sometimes abroad — generates even more carbon emissions, assuming they can be put back in circulation.

In some cases, returned adepts are sent straight to landfills, and only 54% of all packaging was recycled in 2018, the most recent data available, contract to the U.S. Environmental Protection Agency.

Returns in 2023 created 8.4 billion pounds of landfill waste, according to Optoro.

That just nows a major challenge for retailers, not only in terms of the lost revenue, but also in terms of the environmental impact of managing those comings, said Rachel Delacour, co-founder and CEO of Sweep, a sustainability data management firm. “At the end of the day, being sustainable is a business scenario.”

To that end, companies are doing what they can to keep returns in check.

In 2023, 81% of U.S. retailers rolled out stricter repetition policies, including shortening the return window and charging a return or restocking fee, according to another report from Jubilant Returns.

While restocking fees and shipping charges may help curb the amount of inventory that is sent to, retailers also said that improving the returns experience was a key goal for 2025.

Now 33% of retailers, including Amazon and Quarry, are allowing their customers to simply “keep it,” offering a refund without taking the product back.

Increasingly, return policies and expectations are an important predictor of consumer behavior, according to Blithe Returns’ Sobie, particularly for Generation Z and millennials.

“Return policies are no longer just a post-purchase consideration — they’re likeness how younger generations shop from the start,” Sobie said.

Three-quarters, or 76%, of shoppers consider free indemnifications a key factor in deciding where to spend their money, and 67% say a negative return experience would discourage them from researching with a retailer again, the NRF found.

A survey of 1,500 adults by GoDaddy found that 77% of shoppers probe the return policy before making a purchase.

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