US Retail Ecommerce Returns 2023

How Retailers Can Reduce Costs While Retaining Customers

Report by Sky Canaves  | Feb 8, 2023
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Table of Contents
Executive Summary
Returns surged during the pandemic-fueled ecommerce boom, but some relief is in sight.
Online purchases will account for a growing share of total US retail returns.
Apparel and accessories lift overall return rates for ecommerce.
Problems with size, color, and fit drive online returns.
Bracketing is on the rise, especially among younger shoppers.
The use of third-party drop-off locations for returns is growing.
Consumers prioritize free returns above all else.
Consumers are willing to pay for convenient returns.
Physical locations offer incentives for in-person returns.
Shipping costs are the top challenge for retailers.
Rising returns fraud is adding to retailers’ costs.
What should retailers do to reduce and manage ecommerce returns?
Insider Intelligence Interviews
Sources
Media Gallery
About This Report
Generous returns policies have encouraged shoppers to buy online, but an unsustainable wave of returned goods is forcing retailers to rethink their strategies.
Topics
Consumer Behavior
Digital Shoppers & Buyers
Ecommerce Tactics
United States
Table of Contents
Executive Summary
Returns surged during the pandemic-fueled ecommerce boom, but some relief is in sight.
Online purchases will account for a growing share of total US retail returns.
Apparel and accessories lift overall return rates for ecommerce.
Problems with size, color, and fit drive online returns.
Bracketing is on the rise, especially among younger shoppers.
The use of third-party drop-off locations for returns is growing.
Consumers prioritize free returns above all else.
Consumers are willing to pay for convenient returns.
Physical locations offer incentives for in-person returns.
Shipping costs are the top challenge for retailers.
Rising returns fraud is adding to retailers’ costs.
What should retailers do to reduce and manage ecommerce returns?
Insider Intelligence Interviews
Sources
Media Gallery

Executive Summary

Retail returns surged over the past three years, far outpacing the unprecedented growth in ecommerce sales. As retailers struggle for profitability amid ongoing economic uncertainty, they must manage the costs of returns without losing customers.

Key Question: How can retailers limit their ecommerce return costs while still meeting consumer expectations?

US Retail Return Volume, 2020-2026 (billions, % change, and % total retail sales)
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KEY STAT: Overall retail return rates will grow just 2.2% this year, following rapid growth during the height of the pandemic. But ecommerce returns will stay above pre-pandemic levels throughout our forecast period.

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    Table of Contents

    1. Executive Summary
    2. Returns surged during the pandemic-fueled ecommerce boom, but some relief is in sight.
    3. Online purchases will account for a growing share of total US retail returns.
    4. Apparel and accessories lift overall return rates for ecommerce.
    5. Problems with size, color, and fit drive online returns.
    6. Bracketing is on the rise, especially among younger shoppers.
    1. The use of third-party drop-off locations for returns is growing.
    2. Consumers prioritize free returns above all else.
    3. Consumers are willing to pay for convenient returns.
    4. Physical locations offer incentives for in-person returns.
    5. Shipping costs are the top challenge for retailers.
    6. Rising returns fraud is adding to retailers’ costs.
    1. What should retailers do to reduce and manage ecommerce returns?
    2. Insider Intelligence Interviews
    3. Sources
    4. Media Gallery

    Charts in This Report

    US Retail Return Volume, 2020-2026 (billions, % change, and % total retail sales)US Retail Ecommerce Return Volume, 2020-2026 (billions, % change, and % total ecommerce sales)
    US Retail Return Penetration, Ecommerce vs. Non-Ecommerce, 2020-2026 (billions, ecommerce % of total retail returns, and non-ecommerce % of total retail returns)US Apparel & Accessories Ecommerce Return Volume, 2020-2026 (billions, % change, and % total apparel & accessories ecommerce sales)
    Leading Reasons US Adults Initiate a Return, July 2022 (% of respondents)US Shoppers Who Bracketed* Purchases in the Past Year, Under Age 30 vs. Over Age 45, Sep 2022 (% of respondents)
    US Retail Ecommerce Returners, by Return Method, 2020-2026 (millions and % change)Factors That US Adults Care About When Returning an Order, Oct 2022 (% of respondents)
    Reasons US Adults Return Products In-Store, July 2022 (% of respondents)Product Returns Challenges According to Retail Executives in North America, Nov 2022 (% of respondents)
    Types of Return Fraud Experienced by US Retailers, Oct 2022 (% of respondents)

    Interviewed for This Report

    Aaron Begner
    Forter
    General Manager, EMEA
    Interviewed January 30, 2023
    Thomas Borders
    Inmar Intelligence
    Vice President and General Manager
    Interviewed January 19, 2023
    Tobias Buxhoidt
    parcelLab
    Founder and CEO
    Interviewed January 17, 2023

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    Download
    Report
    Deck
    The One-Pager
    Share
    Table of Contents
    Executive Summary
    Returns surged during the pandemic-fueled ecommerce boom, but some relief is in sight.
    Online purchases will account for a growing share of total US retail returns.
    Apparel and accessories lift overall return rates for ecommerce.
    Problems with size, color, and fit drive online returns.
    Bracketing is on the rise, especially among younger shoppers.
    The use of third-party drop-off locations for returns is growing.
    Consumers prioritize free returns above all else.
    Consumers are willing to pay for convenient returns.
    Physical locations offer incentives for in-person returns.
    Shipping costs are the top challenge for retailers.
    Rising returns fraud is adding to retailers’ costs.
    What should retailers do to reduce and manage ecommerce returns?
    Insider Intelligence Interviews
    Sources
    Media Gallery
    About This Report
    Generous returns policies have encouraged shoppers to buy online, but an unsustainable wave of returned goods is forcing retailers to rethink their strategies.
    Topics
    Consumer Behavior
    Digital Shoppers & Buyers
    Ecommerce Tactics
    United States
    Table of Contents
    Executive Summary
    Returns surged during the pandemic-fueled ecommerce boom, but some relief is in sight.
    Online purchases will account for a growing share of total US retail returns.
    Apparel and accessories lift overall return rates for ecommerce.
    Problems with size, color, and fit drive online returns.
    Bracketing is on the rise, especially among younger shoppers.
    The use of third-party drop-off locations for returns is growing.
    Consumers prioritize free returns above all else.
    Consumers are willing to pay for convenient returns.
    Physical locations offer incentives for in-person returns.
    Shipping costs are the top challenge for retailers.
    Rising returns fraud is adding to retailers’ costs.
    What should retailers do to reduce and manage ecommerce returns?
    Insider Intelligence Interviews
    Sources
    Media Gallery
    Download PDF

    authors

    Sky Canaves

    Contributors

    Suzy Davidkhanian
    Principal Analyst, Retail & Ecommerce
    Blake Droesch
    Analyst
    Wendy Louie-Lam
    Senior Forecasting Analyst
    Amy Rotondo
    Director, US Research