2024 Consumer Returns in the Retail Industry Report
Report
2024 Consumer Returns in the Retail Industry
Appriss Retail, in collaboration with Deloitte
Executive summary
Appriss Retail, in collaboration with Deloitte, has developed a comprehensive report on consumer returns in the retail industry. As a leader in data and analytics solutions, Appriss Retail helps reduce retail losses, prevent return and claim fraud, and enhance the consumer experience. Serving 60 of the top 100 U.S. retailers, Appriss Retail supports one-third of all U.S. omnichannel sales across 150,000 locations. The report combines insights from physical stores and online channels, featuring data from surveys of 150 North American retail executives, 1,000 consumers, and the U.S. Census Bureau.
Returns remain a considerable cost to retailers. The total return dollars in this report don’t account for the margin loss and other frictional costs associated with processing and handling returns. The growth of online shopping continues to have a growing impact on in-store returns. This year Buy Online Return In-Store (BORIS) and Buy Online Return Online (BORO) combined account for over 52% of all return dollars.
Although retailers continue to test new policies and systemic rules, the amount of fraud and abuse remains a significant issue that should be addressed. Fraudsters and abusers are often becoming adept at circumventing retailers’ controls across all channels including call centers.
- Total returns for the retail industry amounted to $685 billion in merchandise in 2024.*
- The total returns rate as a percentage of sales for 2024 is 13.21%.*
- The percentage of abuse and fraud impacting total returns in 2024 is 15.14%.*
- The total amount of dollars lost to fraudulent and abusive returns and claims in 2024 is $103 billion.*
- 84% of retail executives report their companies have changed return policies in the past year to combat fraud, however this is having adverse implications.**
- 55% of consumers have decided not to buy from retailers due to restrictive return policies, while 31% stopped shopping at certain retailers due to negative return experiences.**
* Source: Returns data are generated from actual returns processed by Appriss Retail. Executive and consumer data are based on survey results.
** Source: How Important Are Returns to Customers?
Merchandise sales, returns, and fraud and abuse
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$5.19 Trillion
United States Census Bureau total US retail sales
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$685 Billion
Merchandise returned, as a % of total sales (avg. 13.21%)
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$103 Billion
Fraudulent returns and claims, as a % of total returns (avg. 15.14%)
|
Source: Appriss Retail and United States Census Bureau
Frequent types of return fraud or abuse
150 retail executives were surveyed to identify the most common types of returns fraud and abuse they have encountered. Here are the results.
| Type of return fraud or abuse | Reported by |
|---|---|
| Wardrobing (used merchandise returned) | 60% |
| Returns from fraudulent or stolen tender (gift card fraud) | 55% |
| Returns of stolen merchandise (return of shoplifted merchandise) | 48% |
| Returns with counterfeit receipts/e-receipts | 48% |
| Bracketing (buying multiple items, returning some) | 47% |
| Employee return fraud or collusion | 39% |
Source: Appriss Retail and Retail Dive Survey: How Important Are Returns to Customers?
Summary of returns and returns fraud
| Metric | Rate | Dollars |
|---|---|---|
| United States Census Bureau total US retail sales | 100% | $5,192,000,000,000 |
| Total in-store sales | 71.55% | $3,715,000,000,000 |
| Total online sales | 28.45% | $1,477,000,000,000 |
| Total retail return rate | 13.21% | $685,863,000,000 |
| Total fraudulent and abusive returns and claims rate | 15.14% | $103,839,000,000 |
| Return rate from in-store sales | 8.72% | $323,727,000,000 |
| Return rate from online sales (BORO + BORIS) | 24.52% | $362,160,000,000 |
| BORIS return rate | 14.58% | $215,347,000,000 |
| BORO return rate | 9.94% | $146,813,000,000 |
Source: Q1–Q3 2024: U.S. Census Bureau; Q4 2024: Appriss Retail projections based on actual Q4 2023 data
In-store, online and BORIS returns
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8.72%
In-store return rate
$323 billion
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14.58%
BORIS
$215 billion
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9.94%
BORO
$146 billion
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- Online sales are expected to increase by 5%, achieving a total of $1.48 trillion in total online sales.*
- Returns from online sales (inclusive of BORO and BORIS) are $362 billion.*
- A growing challenge for retailers in online returns is claims and appeasements. Claims and appeasement fraud and abuse are estimated to be worth $21B. Claims arise when shoppers report issues such as missing deliveries, damaged items, or product defects. To address these concerns, retailers often offer appeasements, such as credits, to help maintain customer satisfaction.**
- When identifying fraudulent online returns, retailers surveyed stipulate that the most common indicator is empty boxes at 31%.***
- The return rate for in-store purchases was 8.72%, while online returns reached 24.52%. Combined, the overall return rate stands at 13.21%.****
- As retailers adopt no-receipt, no-return policies, fraudulent actors may shift to tactics like counterfeit returns. To help them stay ahead, retailers should continually adapt to emerging forms of return fraud.
* Source: U.S. Census Bureau
** Source: 2024 Claims and Appeasements Report
*** Source: How Important Are Returns to Customers?
**** Source: Appriss Retail returns data
Return policies
Returns are often a thorny issue for retailers. 83% of companies surveyed have tightened return policies to decrease returns, and 84% to combat fraud. But are these efforts hurting customer satisfaction more than necessary? What the data suggests is that policy changes are having little effect on deterring fraud and abuse. Policies can be subject to human error, bias, and are frequently bypassed to appease the consumer.
Top fraud-prevention efforts and tools deployed
| Effort / tool | Deployed by |
|---|---|
| Requiring receipts/proof of purchase | 67% |
| Limiting return windows to 30 days or less | 59% |
| Manually monitoring transaction data for fraudulent behavior | 54% |
| Implemented real-time return technology to approve, warn, or deny a return or claim based on behavior patterns | 35% |
1% report deploying none of these measures.
Source: Appriss Retail and Retail Dive Survey: How Important Are Returns to Customers?
Consumer impact
These changes to return policies can have long-term negative impacts on consumer loyalty and future spend, while positive return experiences contribute to customer satisfaction and retention.
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55%
of consumers have decided not to buy from retailers due to restrictive return policies
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36%
of consumers have had a negative return experience
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31%
stopped shopping at certain retailers due to negative return experiences
|
|
70%
of consumers made additional purchases due to positive return experiences
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89%
would make more purchases if they had positive return experiences
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Source: Appriss Retail and Retail Dive Survey: How Important Are Returns to Customers?
Who owns returns
Appriss Retail is working to identify industry-leading practices, starting with a key question: who should own the returns process, and what are the leading practices for helping to manage it?
Returns have emerged as a challenge for retailers, driven by higher return rates from digital sales, BOPIS (buy online, pick up in store), and BORIS (buy online, return in store). These issues are further compounded by professional fraudsters and shifting consumer return behaviors.
Early findings from the Appriss Retail survey indicate that most retailers have not yet established a dedicated role to oversee returns. More detailed research is needed to clarify who should manage the returns process and what responsibilities this role should encompass.
| Function that owns returns | Share |
|---|---|
| Operations | 45% |
| Finance / loss prevention | 25% |
| Digital | 21% |
| Merchandising | 9% |
Source: Appriss Retail and Retail Dive Survey: How Important Are Returns to Customers?
Holiday sales and highest return day of the year
2024 holiday period: 11/17/2024 – 2/1/2025
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$1 Trillion
Total US retail sales expected
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$694.7 Billion
In-store sales expected
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$308.7 Billion
Online sales expected
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Source: United States Census Bureau
Last year’s holiday period ran 11/20/2023 to 2/1/2024. The highest return day for that holiday period was 12/29/2023.
Source: Appriss Retail transaction data
The holiday season offers retailers a chance to boost their yearly performance, thanks to higher foot traffic and increased sales.
However, it also brings a surge in returns, along with heightened risks of fraud and abuse. The increased volume can lead store associates to bypass policies to keep lines moving, while online rules engines are often overridden to accommodate the seasonal rush.
To address these challenges, retailers should act. Implementing technologies and processes takes time, and starting early can help ensure a better chance to optimize next year’s holiday season.
Closing
Returns can no longer be thought of as part of doing business. They represent a significant cost to retailers, with $685 billion in merchandise returned in 2024 and $103 billion lost to fraudulent and abusive returns and claims.* These figures underscore an urgent need for retailers to adapt and evolve their strategies. The fine line for retailers is to implement solutions that have minimal impact on the consumer experience. Brand loyalty can be fragile, and competition continues to grow, so holding on to consumers is often a key to long-term success.
* Source: Appriss Retail transaction data
Survey demographics
The 2024 Consumer Returns in the Retail Industry report draws insights from a blend of data sources, including the United States Census Bureau, Appriss Retail customer data, and a Retail Dive survey. Appriss Retail’s client base features over 60 of the top 100 U.S. retailers. Detailed demographics of the Retail Dive survey respondents are outlined below.
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Participants
150 retail executives from Retail Dive databases
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Geographic scope
Companies selling to customers in the U.S. or Canada, accepting returns
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Business type
Retail 74% · Direct-to-consumer 26%
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About Appriss Retail
Appriss Retail provides retailers with protection against fraud and abuse for every transaction, no matter where it happens. With more than 20 years of retail data science expertise and experience, we’ve built a collective, omnichannel intelligence platform that is trusted by over 60 of the top 100 U.S. retailers, covering one-third of all U.S. omnichannel sales across 150,000 locations. Globally, Appriss Retail reaches 45 countries across six continents. The company provides relevant, actionable, and profitable collective intelligence to retail operations, finance, marketing, and loss prevention teams. Appriss Retail’s performance-improvement solutions yield measurable results with a significant return on investment. For more information about Appriss Retail, visit apprissretail.com.
About Deloitte
This article contains general information only and Deloitte is not, by means of this article, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This article is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this article.
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© December 2024 Appriss Retail. All rights reserved. AR3023 · Copyright © 2024 Deloitte Development LLC. All rights reserved.
