A new report from the National Retail Federation and Appriss Retail found that 14.5% of all retail sales have been returned in 2023.
“Retailers have been focused on efforts to mitigate returns, as total returns for the industry amounted to $743 billion in merchandise in 2023,” according to the report.
Of that $743 billion, $101 billion has been lost to returns abuse and fraud, the report found. That represents an average of about 13.7% of returns being fraudulent.
The NRF said U.S. retail industry sales reached $5.13 trillion in 2023. It said consumers spent about $3.72 trillion in stores (or 72.6%), and about $1.41 trillion online (27.4%).
“Retailers continue to test and implement new ways to minimize losses from returns, particularly those that are fraudulent, while at the same time optimizing the shopping experience for their customers,” said Mark Mathews, NRF executive director of research. “Retailers’ efforts include providing greater detailed descriptions on sizing and fit of products for online purchases and requiring a receipt with returned items. As a whole, the industry is prioritizing efforts to reduce the amount of merchandise returned in stores and online.”
The approach to the 2023 Consumer Returns in the Retail Industry report is slightly different than years past, the report says. NRF has partnered with Appriss Retail to pair its customers’ returns data with NRF survey responses. Appriss Retail’s customers include 60 of the top 100 retailers in the United States and “allow greater granularity in the data.” Given the change in methodology, unless otherwise noted, the report does not compare 2023 numbers to the 2022 returns report.
Online retail returns in 2023
For every $1 billion in sales, the average retailer incurs $145 million in merchandise returns, according to the report.
And online sales have an even higher rate of returns than in-store sales in 2023, according to the report. The NRF and Appriss Retail data projects online returns for items purchases on the web to be 17.6% of total online sales.
Including items bought online and returned in stores, in-store returns amounted to 13.3% of sales (or about $495.34 billion). Excluding in-store returns of online orders, that figure drops to about 10% (or $373.18 billion). Nearly half (49.7%) of in-store returns originated as an online purchase, the report found.
The report estimates retail sales will increase by as much as 4%, with digital increasing by 10%.
“Digital growth has an increased impact on in-store returns rates and leads to a significant increase in online claims and appeasements for missed, late, or damaged deliveries. Fraud and abuse are growing at a significant pace in this category,” the report says.
Holiday sales and returns
The NRF and Appriss Retail estimate $966 billion in U.S. holiday sales, based on survey data from September through October. The survey data indicates returns totaled $148 billion, or an average of 15.4%, of merchandise. Of that $148 billion in returns, survey data shows that $24.5 billion of it (or about 16.5%) was fraudulent.
In 2022, the report says, retailers accepted 22.1% of returns without a receipt. This number has dropped by half in 2023. Survey data also estimates that 17% of non-receipted returns are fraudulent, a 14% increase from 2022.
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