Retail Returns Projected To Hit $850 Billion In 2025
By Ethan Faverino |
According to the newly released 2025 Retail Returns Landscape, U.S. retailers project that nearly $850 billion in merchandise will be returned this year, equivalent to 15.8% of total sales.
The figure, while substantial, reflects a slight decline from last year’s 16.9% return rate and $890 billion in total returns.
“Returns are no longer the end point of a transaction,” said NRF Vice President of Industry and Consumer Insights Katherine Cullen. “They provide an opportunity for retailers to create a positive experience for customers and can translate to brand loyalty. Retailers are constantly evolving and working to meet customer expectations, and they recognize the importance the returns process plays.”
While overall return rates remain steady, online sales continue to drive higher volumes, with an estimated 19.3% of e-commerce purchases expected to be returned in 2025.
Generational shifts are amplifying these trends, particularly among Gen Z shoppers (age 18-30) who averaged 7.7 online returns over the past 12 months, more than any age group.
Consumer demands for seamless returns are intensifying as 82% of shoppers now cite free returns as a major factor in their purchasing decisions, up from 76% last year. Additionally, 76% of shoppers are more likely to choose the return method offering instant refunds or exchanges.
However, a negative returns experience carries significant consequences: 71% of consumers report they are less likely to shop with a retailer again following a poor encounter, rising from 67% in 2024. Four out of five consumers say they are likely to share their bad experience with friends and family, potentially magnifying reputational damage.
Retailers are navigating these expectations while contending with escalating operational costs and external pressures. Surveyed merchants identified increasing online sales and reducing return rates as their top priorities in 2026.
Key drivers for charging return fees include:
- Processing costs (40%)
- Higher carrier shipping expense (40%)
- Economic uncertainty tied to tariffs (33%)
Return fraud remains another persistent challenge, accounting for 9% of all returns. Among retailers tracking fraud, 71% reported an increase in overstated return quantities, 65% noted “empty box” or “box of rocks” incidents, and 64% saw rises in decoy returns involving counterfeit items. To combat return fraud, 85% of retailers have begun to use AI to detect or prevent fraud from happening.
Notably, 45% of consumers—particularly when dissatisfied— believe that “bending the truth” is acceptable during a return.
David Sobie, co-founder and CEO of Happy Returns, said, “Return policies and their overall process have transformed into a strategic touchpoint for retailers, influencing how younger consumers shop from the outset. To stay competitive amid rising return rates and behaviors like bracketing, retailers must modernize their reverse logistics to enhance customer satisfaction, reduce fraud, and safeguard their operations in today’s high-pressure retail landscape.”
Looking into the holiday season, retailers anticipate 17% of holiday sales will be returned, consistent with prior years. To manage this surge, 49% plan to lean on third-party logistics partners, 43% will hire seasonal staff, and 37% intend to extend return windows.
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
