Key Takeaways
- In 2023, the average return rate for online retail purchases in the US reached 24.4%, up from 20.8% in 2021
- US e-commerce returns totaled $218 billion in lost merchandise sales in 2022, representing 16.5% of gross merchandise value
- Brick-and-mortar stores saw a return rate of 8.9% in 2023 compared to 24.4% for online
- 78% of online apparel orders are returned due to fit issues
- Electronics returns for shoes average 50% in online fashion
- Furniture online returns reach 25-30% primarily for damage or wrong size
- Didn't fit/wrong size accounts for 58% of all apparel returns
- Changed mind is the top reason for 27% of general merchandise returns
- Defective/damaged goods cause 22% of electronics returns
- Retailers lose $47 billion annually to return fraud in the US
- Processing one online return costs retailers up to $30-50, totaling $82 billion yearly
- Wardrobing (wear and return) costs fashion $20 billion annually
- 85% of consumers expect free returns, driving $50B policy costs
- Retailers with strict return policies see 20% lower return rates
- Buy Online Return In Store (BORIS) adopted by 60% retailers, reducing costs 30%
Rising online return rates cost retailers billions and are a growing problem.
Category-Specific Returns
- 78% of online apparel orders are returned due to fit issues
- Electronics returns for shoes average 50% in online fashion
- Furniture online returns reach 25-30% primarily for damage or wrong size
- Beauty product returns are 10-15% due to allergic reactions or color mismatch
- Home improvement goods like paint return 20% for wrong shade
- Toys return 15-20% post-holidays for dissatisfaction
- Grocery online returns 8% for damaged or wrong items
- Consumer electronics returns 15% for defects or wrong specs
- Jewelry returns 7% mostly for sizing issues
- Sporting goods returns 18% for fit or performance
- Books return 5% for damage or wrong edition
- Automotive parts 25% returns for incompatibility
- Office supplies 10% for wrong quantity or defect
- Pet products 12% for wrong size or allergy
- Luggage returns 22% for damage during shipping
- Watches 9% for battery or function issues
- Handbags 20% for material quality complaints
- Sunglasses 17% for prescription errors
- Apparel returns in fast fashion brands like Shein hit 40%
- Mattresses online returns average 15% for comfort issues
- Kitchen appliances 14% returns for malfunction
- Baby products 11% for safety concerns
Category-Specific Returns Interpretation
Financial Impact
- Retailers lose $47 billion annually to return fraud in the US
- Processing one online return costs retailers up to $30-50, totaling $82 billion yearly
- Wardrobing (wear and return) costs fashion $20 billion annually
- Empty box returns fraud $10 billion in 2023 US e-com
- Returns reduce gross margins by 10-15% for apparel retailers
- Logistics costs for returns are 15% higher than outbound shipping
- 20% of returns are never resold, leading to $40 billion inventory loss
- Brick-and-mortar returns cost $15 per item vs $25 online
- Refund abuse costs $15-20 billion yearly in grocery
- Electronics returns lead to $12 billion obsolescence loss
- Furniture returns disposal costs $5 billion annually
- International returns add 20% extra customs fees, $3 billion hit
- Labor costs for returns processing up 25% post-pandemic
- 65% of returns are free shipping, costing $25 billion
- Resale value of returned goods averages 50% of original price
- Holiday returns spike costs retailers $100 billion in Q4
- Small retailers lose 8% revenue to returns vs 5% large chains
- Reverse logistics market valued at $700 billion globally 2023
- Apparel returns erode 12% of EBITDA for mid-tier brands
- Fraudulent returns insurance claims $2.5 billion yearly
- 40% of Gen Z buy-to-return, costing $30 billion
- BOPIS returns reduce costs by 40% vs online, saving $10B
- Used returns landfill waste costs $1 billion in disposal
- Free returns policy increases sales 20% but costs 15% margins
- AI fraud detection saves $5 billion in return losses annually
Financial Impact Interpretation
Policy and Technology Impacts
- 85% of consumers expect free returns, driving $50B policy costs
- Retailers with strict return policies see 20% lower return rates
- Buy Online Return In Store (BORIS) adopted by 60% retailers, reducing costs 30%
- RFID tagging reduces returns by 15% in apparel via better inventory
- Extended return windows (60+ days) boost loyalty 18%
- Virtual try-on tech lowers beauty returns by 35%
- Blockchain for returns tracking piloted, reducing fraud 40%
- 70% consumers abandon carts if no free returns
- Self-service return portals cut call center costs 50%
- No-return policies for final sale items reduce abuse 22%
- AR fitting rooms decrease apparel returns 28%
- Machine learning predicts returns, optimizing inventory 20%
- Partnered returns with UPS/FedEx save 15% logistics
- Receiptless returns via app increase convenience, adopted 75%
- Sustainability policies charge for returns, cutting volume 12%
- Dynamic pricing for returns based on item condition, recovering 65% value
- Mobile return labels generate 40% faster processing
- Data analytics on returns patterns improve product dev 25%
- Zero-waste return programs resell 80% goods
- Customer segmentation for return policies boosts retention 15%
- Integration of returns with CRM reduces repeat offenders 30%
- 3D body scanning cuts fit returns 32%
- Automated sorting robots speed returns 50%
- Policy transparency increases trust, sales up 10%
- Gen Z favors eco-friendly return options, 55% switch brands
- Cross-border return policies challenge 40% of global retailers
- Voice commerce returns lower due to better descriptions, 10% less
- Subscription box returns managed via credits, reducing cash refunds 25%
- 92% of consumers check return policy before purchase
Policy and Technology Impacts Interpretation
Return Rates and Volumes
- In 2023, the average return rate for online retail purchases in the US reached 24.4%, up from 20.8% in 2021
- US e-commerce returns totaled $218 billion in lost merchandise sales in 2022, representing 16.5% of gross merchandise value
- Brick-and-mortar stores saw a return rate of 8.9% in 2023 compared to 24.4% for online
- During the 2022 holiday season, apparel returns hit 30% of sales volume online
- Global retail returns are projected to reach $1.06 trillion by 2027, growing at 11.7% CAGR
- In 2022, 30% of all US retail returns were fraudulent, costing retailers $101 billion
- E-commerce fashion returns averaged 32.5% in Europe in 2023
- US consumers returned $761 billion worth of goods in 2022 across all channels
- Online returns in the UK stood at 27% in 2023, higher than the 22% EU average
- Apparel and accessories had the highest return rate at 28% in US e-commerce in 2022
- General merchandise return rates were 14.2% for online sales in 2023
- In 2023, 67% of returns happened within 30 days of purchase
- Footwear online returns averaged 25% globally in 2022
- Consumer electronics returns were 12.5% in US retail in 2023
- Home goods and furniture returns hit 20% online in 2022
- Jewelry returns were lowest at 6.8% in e-commerce in 2023
- Grocery online returns averaged 5.2% in 2023 due to perishables
- Beauty products had 11% return rate online in US 2022
- Toys and games returns were 15.4% during holidays 2022
- Sporting goods returns averaged 18% online in 2023
- Books and media returns were 4.7% in e-commerce 2023
- Automotive parts online returns hit 22% in 2022
- Office supplies returns were 9.3% online US 2023
- Pet supplies returns averaged 13% in 2023 e-com
- Luggage and bags returns 19.2% online 2022
- Watches returns were 8.5% in luxury e-com 2023
- Handbags online returns 21% in 2023
- Sunglasses returns averaged 16.8% online 2022
- Online returns processing costs retailers $55 per return on average in 2023
Return Rates and Volumes Interpretation
Return Reasons
- Didn't fit/wrong size accounts for 58% of all apparel returns
- Changed mind is the top reason for 27% of general merchandise returns
- Defective/damaged goods cause 22% of electronics returns
- Wrong item shipped leads to 15% of all online returns
- Allergic reaction or skin issue for 18% beauty returns
- Color/shade mismatch 25% for paint and cosmetics
- Late arrival past return window 8% of returns
- Poor quality/materials 20% of fashion returns
- No longer needed 30% post-holiday toy returns
- Duplicate purchase 12% of consumer returns
- Shipping damage 16% for furniture/large items
- Incorrect fit for footwear 45%
- Technical malfunction 28% electronics
- Gift returns 35% during holidays
- Hygienic reasons prevent 40% of opened beauty returns
- Assembly issues 10% furniture returns
- Scent dissatisfaction 15% candles/fragrances
- Performance not as expected 22% sporting goods
- Wrong prescription 30% eyewear returns
- Pet didn't like it 18% pet products
- Size too small/large 60% kids clothing
- Overbought 14% grocery returns
Return Reasons Interpretation
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