$816 Billion In Returns Expected This Year, Retail Group Reports

Despite predictions of a surge in returns this holiday season, the National Retail Federation expects the overall rate of returns for the full year to remain the same as last year, although the dollar amount for the year will increase to $816 billion.

The return rate for this year is expected to be 16.5%, nearly identical to the 16.6% rate in 2021, according to a report released today by the National Retail Federation (NRF) and data and software provider Appriss Retail.

The return rate for holiday sales is expected to be 17.9%, adding up to $171 billion.

The expected dollar volume of returns is up $55 billion over last year’s number of $761 billion.

The increase in dollar volume is driven by increased retail sales and prices, not increased incidence of returns, according to the report.

Total retail sales are expected to be $4.86 trillion this year, compared to $4.583 trillion in 2021.

The report, based on a survey of 70 retailers conducted this fall, found that for every $1 billion in sales, the average retailer gets $165 million worth of merchandise returned. The survey also found that for every $100 in returned merchandise accepted, retailers lose $10.40 due to fraud.

Half of the retailers surveyed (50%) said they have experienced fraudulent returns of used, non-defective merchandise (a type of fraud known as wardrobing), while 41.4% said they have had returns of shoplifted or stolen merchandise.

The survey found that online rates of returns are consistent with the overall rate this year, the first time that has happened since the report began collecting online data. Online return rates decreased to 16.5% from 20.8% in 2021. NRF and Appriss expect $212 billion worth of the $1.29 trillion in online purchases this year to be returned. Of those returns, $22.8 billion, or 10.7%, will be deemed to be fraudulent, according to the report.

Of the over $3.66 trillion in expected brick-and-mortar store sales, $603 billion is expected to be returned, with $62.1 billion of those returns, or 10.3%, expected to be fraudulent.

“Even with 29 continuous months of retail sales growth, consumers have remained steady with the overall rate of merchandise returned to retailers this year,” Mark Mathews, NRF’s vice president of research development and industry analysis, said in releasing the findings.

While the returns are an expense for the retailer, both in lost sales and costs – nearly 44% of the retailers surveyed said they plan to hire additional staff to handle returns – Mathews chose to look on the bright side of returns.

“Returns can also provide recourse through positive customer engagement and, potentially, another purchase,” he said.