
The National Retail Federation and Appriss Retail released a report showing that consumers are expected to return more than US $ 816 billion worth of goods purchased at retail stores in 2022. The average return rate remains steady at 16.5 per cent, up from 16.6 per cent in 2021.
The study found that for every US $ 1 billion in sales, retailers lose an average of US $ 165 million to returns. For every US $ 100 in accepted returns, retailers lose US $ 10.40 to returns fraud. Online return rates have steadily declined, falling from 20.8 per cent in 2021 to 16.5 per cent in 2022.
In 2022, online retail sales in the United States are expected to reach US $ 1.29 trillion. An estimated US $ 22.8 billion (10.7 per cent) of the US $ 212 billion in online purchases returned globally is attributed to fraudulent activity.
“Even with 29 continuous months of retail sales growth, consumers have remained steady with the overall rate of merchandise returned to retailers this year,” said Mark Mathews, NRF’s Vice President of research development and industry analysis, adding, “While oftentimes returns represent a lost sale for a retail establishment, returns can also provide recourse through positive customer engagement and, potentially, another purchase.”
Half of the retailers said they experienced returns of used, non-defective merchandise (also known as wardrobing) in the past year, and 41.4 per cent said they experienced returns of stolen merchandise.
In-shop sales are expected to exceed US $ 3.66 trillion, with US $ 603 billion returned. Approximately US $ 62.1 billion, or 10.3 percent, of these returns, are expected to be due to fraud.
“The holidays typically include a spike in retail activity, but higher return rates can also impact profitability,” said Steve Prebble, CEO of Appriss Retail. “Retailers must look for ways to individualise the returns process through data-driven insights. This will minimise the risk of accepting fraudulent returns while enhancing the customer experience for loyal shoppers.”
Retailers can expect an average merchandise return rate of 17.9 per cent, or nearly US $ 171 billion from the holiday shopping season. According to NRF, total retail sales are expected to increase from 6 per cent to 8 per cent in 2022 to more than US $ 4.86 trillion, and November and December holiday sales are expected to increase from 6 per cent to 8 per cent over 2021 to more than US $ 942.6 billion despite inflationary challenges.