Inventory issues, return fraud pose holiday challenge for retailers
Challenges are mounting for retailers ahead of the holiday season.
Inventory concerns, tariff pressures and fraud risk are all having an impact on retailers, according to ReturnPro’s fifth Annual Holiday Returns Report. According to the survey, 57% of retailers cite low stock as a moderate-to-severe problem heading into the holidays. This is a sharp contrast with last year, when 56% of retailers reported higher inventory levels than the prior year, including nearly 19% who said levels were much higher.
[READ MORE: Salesforce: Global online holiday sales to hit record $1.25T]
Because of planning delays, just 16% of retailers began holiday sales in August or earlier, compared to 31% last year, with most activity now concentrated in September (28%) and October (35%). Adding to supply chain pressures, more than one-third (69%) of retailers are more stressed about tariffs now than they were in March.
Only 6% of retailers now call returns a severe problem, down from 49% in 2023. The report found that on average, a typical shopper sent back more than $51 worth of goods last holiday season, and nearly half (44%) of retailers said the figure exceeded $100 per person.
Still, three-quarters (75%) of retailers say return fraud worsens during the holidays, with common schemes including shoplifted goods (25%), used-but-non-defective merchandise (24%), and fraudulent or stolen payment tender (17%).
When asked about holiday policies in 2025, 57% plan to keep policies unchanged, while 27% plan to extend return windows and 16% plan to shorten them.
Two-thirds (65%) of retailers are implementing measures to monitor or prohibit excessive return patterns this holiday season. These included offering free in-store returns to reduce shipping costs (18%), using technology to improve product accuracy at purchase (17%), limiting free shipping to loyalty members (15%), and more.
In other findings, 52% of the executives surveyed expect more holiday sales growth in 2025 than in years prior, attributing the growth to increased prices, not volume.
“The holiday season is always a test for retailers, but this year the stakes are higher because of tighter inventory, rising fraud risks, and growing consumer expectations for instant, frictionless returns,” said Sender Shamiss, co-founder and CEO of ReturnPro. “Companies that view returns not just as a cost center, but as a lever for recovery, customer loyalty, and operational discipline will be the ones positioned for success during the 2025 holiday season.”
ReturnPro surveyed 500 senior retail executives at companies generating more than $500M in annual revenue. The full report can be found here.
