Retailers Expect Higher-Than-Usual Return Rate as eCommerce Expands

As consumers finish up their holiday shopping for this year, retailers reportedly expect to see a lot of returns in January.

On average, retailers expect this holiday shopping season’s return rate to be 17% higher than usual, CNBC reported Tuesday (Dec. 24), citing data from the National Retail Federation (NRF).

January is traditionally the month that sees the most returns — to the extent that experts have dubbed the month “Returnuary,” according to the report.

This year, the NRF expects the share of all merchandise sales returned to be 17%, up from 15% in 2023, the report said.

The report attributed the growth in returns to the expansion of eCommerce and the growing comfort consumers have in returning goods they’ve bought.

Nearly two-thirds of consumers buy items in multiple sizes or colors, intending to return some of them later, the report said, citing data from Happy Returns. Experts dub this practice “bracketing.”

About 7 out of 10 consumers buy an item to use it once and then return it — a practice called “wardrobing” — the report said, citing a report by Optoro.

Returns impact both the retailer’s bottom line and its sustainability efforts, as the returned products generate carbon emissions as they are processed and often end up in landfills, per the report.

To mitigate the challenge of returns, 81% of retailers have tightened their return policies — by reducing the window for returns or raising the fees — while 33% offer the consumer a refund without taking back the product, according to the report.

While trying to reduce the cost of returns, retailers also focus on maintaining a good customer experience. Three-quarters of shoppers say free returns play a role in their decision of where to shop, the report said, citing NRF data.

The Wall Street Journal reported Dec. 1 that a Blue Yonder survey found that more than two-thirds of consumers who are aware of stricter return policies say those rules have kept them away from making purchases.

Consumers shopping directly from retailers are disproportionately likely to factor in how easy and convenient a given merchant’s return and refund procedures are when shopping from a retailer’s website or app, according to the PYMNTS Intelligence and Adobe collaboration, “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces.”