Retail Experiences Surge of Returns
Tiya Antony
Fashion News Editor
The rise in online shopping has caused retail companies to adjust their return policies and prices in order to prevent fraud. Appriss Retail and Deloitte worked with the US Census Bureau to survey this phenomenon and found that retailers have lost $103 billion in 2024 due to fraudulent returns and claims.
Another report by the National Retail Federation has found that return costs for retailers have increased substantially from $309 billion in 2019 to $890 billion in 2024. Retailers continue to work hard to adjust their return policies in order to reduce fraud and prevent the loss of profit that these companies are facing. Some examples of fraud are stolen clothing, returning worn clothes, returning random items, purchases with stolen credit cards, counterfeit bills, and more which all cause both financial and logistical problems.
Retailers have been trying to combat this issue by implementing return fees or shipping costs. Effective return policies should be created with research teams in order to promote the growth and success of retail stores, that we all depend on. It is still hard for retailers because returns are valued within the market in order to have loyal and happy customers. Finding a balance between customer satisfaction and making profit with returns must be achieved for the success of retail brands.
Within recent years, there has been a surge in bracketing which is the practice of ordering multiple sizes or other variations of the same item to then return unwanted items. This practice is shaping how the younger generations shop from the start, which is with the comfort that they can return purchases they are not satisfied with. This overconsumption and high return volumes puts a strain on retail brands who state that 16% of their annual sales got returned in 2024.
Retailers see the most returns after the Christmas and New Year season. The expected return rate is about 17% higher than their regular return rate during this season. Digital tools are being used in order to have customers easily exchange items or keep their purchases. These innovations should be looked at more in order to have hopes of balancing retail costs and profits with customer satisfaction. Detailed images, accurate delivery dates, virtual try Ons, and AI assisted recommendations could decrease return amounts. Retailers are promoting buying online and returning in store in order to decrease the volume of return shipping that strains workers and instead brings customers into stores. Brands may want to consider promoting exchanges over returns by providing points, discounts, or other incentives.
Contact Tiya at antonyti@shu.edu