Online returns to retailers more than doubled in 2020 from the 2019 levels as the pandemic forced more consumers to shop online in 2020, according to a survey conducted by National Retail Federation and Appriss Retail. However, the total rate of returns is in line with recent years.
In 2020, ecommerce accounted for $565 billion or 14 percent of total U.S. retail sales. About $102 billion of merchandise bought online was returned, with $7.7 billion or 7.5 percent, of these being labeled as fraudulent.
The total merchandise returned to retailers was an estimated $428 billion, about 10.6 percent of total U.S. retail sales in 2020. Meanwhile, about $25.3 billion or 5.9 percent of these returns were fraudulent.
“Retailers view the return process as an opportunity to further engage with customers, as it provides additional points of contact for retailers to enhance the overall consumer experience,” said Mark Mathews, NRF’s vice president of research development and industry analysis.
According to the survey of 62 retailers, the average retailer incurs $106 million in merchandise returns for every $1 billion in sales. They also lose $5.90 to return fraud on every $100 in returned merchandise accepted.
Auto parts were the top category for returns at 19.4 percent, followed by apparel at 12.2 percent, home improvement at 11.5 percent and housewares at 11.5 percent.
More than 20 percent of the returns were completed through credit cards, followed by cash at 12.7 percent and debit cards at 7 percent.
Meanwhile, the bulk of returns from the holiday season sales are expected during the month of January. The NRF had predicted holiday sales to be between $755.3 billion and $766.7 billion, a growth of 3.6 to 5.2 percent from 2019 holiday season, despite the pandemic.
Retailers expect 13.3 percent of merchandise sold during the 2020 holiday season to be returned. This translates to an amount of about $101 billion. About one-third of respondents indicated they planned to hire additional staff to handle returns over the holidays.
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