Retailers believe more than $761 billion in merchandise sold last year was returned by customers, according to a recent report issued by the National Retail Federation.
“As total retail sales continue to accelerate from sustained consumer demand during the pandemic, it is no surprise that the overall rate of returns has also been impacted,” said Mark Mathews, vice president of research development and industry analysis.
“While retailers have indicated that they are seeing an increase in items returned to stores and online, the upside is that it also provides them with additional opportunities to connect further with customers and provide a positive experience.”
The 2021 total rate of returns (16.6%) is up from 10.6% during 2020, but online returns are in line with recent years at an average rate of 20.8%.
According to NRF, online sales accounted for $1.050 trillion of total retail sales in the United States last year. Approximately $218 billion of online purchases were returned, with $23.2 billion (10.6%) deemed fraudulent.
The federation found that for every $1 billion in sales, the average retailer incurs $166 million in merchandise returns. It also reported that for every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud.
The categories with the highest return rates were similar to the reported 2020 metrics. They were: auto parts (19.4%), apparel (12.2%) and home improvement and housewares (tied at 11.5%).
“Retailers must rethink returns as a key part of their business strategy,” said Steve Prebble, head of Appriss Retail, a provider of artificial intelligence-based solutions for retailers which joined NRF in conducting the survey.
“Retail is dealing with an influx of returned items. Now is the time to stop thinking of returns as a cost of doing business and begin to view them as a time to truly engage with your consumers.”