Approximately 16.6% of all U.S. retail sales in 2021, or $761 billion in merchandise, will be returned this year, according to a report from the National Retail Federation and Appriss Retail. Total retail sales reached $4.583 trillion in 2021.
The total rate of returns is up from the 10.6% reported during 2020, but despite soaring ecommerce adoption, online returns will remain in line with recent years at 20.8%. Online returns are always higher than that of stores, as much as 3X more for some categories. According to the NRF, online sales accounted for $1.05 trillion in U.S. retail sales last year, and approximately $218 billion of that was returned.
Earlier in January, NRF reported that retail sales during the 2021 holiday season reached a total of $887 billion, exceeding its forecast of up to 11.5% growth. On average, retailers expect 17.8%, or $158 billion of merchandise sold during the holiday timeframe to be returned.
“As total retail sales continue to accelerate from sustained consumer demand during the pandemic, it is no surprise that the overall rate of returns has also been impacted,” said Mark Mathews, VP of Research, Development and Industry Analysis at the NRF in a statement. “While retailers have indicated that they are seeing an increase in items returned to stores and online, the upside is that it also provides them with additional opportunities to connect further with customers and provide a positive experience.”
According to the NRF survey, for every $1 billion in sales, the average retailer incurs $166 million in merchandise returns. It also found that for every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud. The categories with the highest return rates were similar to those in 2020:
- Auto parts (19.4%);
- Apparel (12.2%); and
- Home improvement and housewares (tied at 11.5%).
Retailers are taking a host of measures to manage the influx of returns, including enabling in-person returns of products from other retailers, as Staples recently did with Happy Returns, and working to reduce returns through data analysis and the application of technologies like virtual fitting.