US retail returns may reach $816 billion! Swallowing up 16% of sellers' profits

Consumer returns in the U.S. retail market are expected to exceed $816 billion this year, according to the latest data from the National Retail Federation (NRF) and ApprissRetail. The data is based on a survey of 70 retailers conducted between September 19 and October 14.

Driven by the increase in retail sales, the average return rate fell slightly to 16.5% from 16.6% last year.

Data shows that for every $1 billion in sales, retailers incur an average of $165 million in return costs, and for every $100 worth of returned merchandise accepted by retailers, they lose $10.40 to return fraud.

Nearly half of the merchants surveyed said that returning merchandise using the merchant as a “fitting room” is the most common form of return fraud, and 41.4% of respondents have experienced returns of shoplifted or stolen merchandise.

During the year, the online return rate dropped to 16.5% from 20.8% in the same period last year.

Online sales are expected to account for about $1.29 trillion of total U.S. retail sales this year, and NRF data shows that of the approximately $212 billion in online purchase returns, $22.8 billion, or 10.7%, will be considered return fraud.

Additionally, of the more than $3.66 trillion in in-store sales expected, $603 million in returned merchandise will be generated. The data shows that approximately $62.1 billion of these returns are expected to be fraudulent, accounting for 10.3% of the total.

“Despite 29 consecutive months of retail sales growth, the overall percentage of merchandise consumers are returning to retailers has remained stable this year,” said Mark Mathews, NRF’s vice president of research development and industry analysis.

The NRF expects total U.S. retail sales to grow 6-8% this year to more than $4.86 trillion. Last month, the trade association reported that U.S. retail sales rose 1.3% seasonally adjusted from September to October.

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