Merchandise returns totaled $428 billion in 2020; top categories of returns were…

Merchandise returns totaled approximately 10.6% of total U.S. retail sales last year.

That’s according to a report released by the National Retail Federation and Appriss Retail, which found that consumers returned an estimated $428 billion in merchandise to retailers in 2020. Roughly 5.9% of the returns were fraudulent, equating to $25.3 billion.

The survey found that for every $1 billion in sales, the average retailer incurs $106 million in merchandise returns. Additionally, for every $100 in returned merchandise accepted, retailers lose $5.90 to return fraud. 

The top categories of merchandise returned include auto parts (19.4%), apparel (12.2%), home improvement (11.5%) and housewares (11.5%). More than one-fifth of returns were completed through credit cards, followed by cash (12.7%) and debit cards (7%).

While the total rate of returns is in line with recent years, online returns more than doubled in 2020 from 2019 and are a major driver of the overall growth of returns. . In 2020, ecommerce accounted for $565 billion or 14% of total U.S. retail sales. Approximately $102 billion of merchandise purchased online was returned, with $7.7 billion (7.5%) labeled as fraudulent.  

On average, retailers expect 13.3% of merchandise sold during the 2020 holiday season to be returned. The estimated cost of these holiday returns is $101 billion. More than one-third of respondents indicated they planned to hire additional staff to handle returns over the holidays. The vast majority expect to see the bulk of returns during the month of January.

The survey of 62 retailers was conducted by NRF and Appriss Retail October 19 – November 2, 2020. Click here to view the survey results.