We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Product returns rate jumps to 16.6% of total U.S. retail sales

Product returns rate jumps to 16.6% of total U.S. retail sales

Retailers struggle to process returns profitably due to customer fraud, lack of automation, NRF and ReverseLogix surveys find.

Reverselogix-Frictionless-Returns-Process-Man-transferring-boxes-in-warehouse@2x.png
January 25, 2022
Ben Ames
No Comments

Consumers are mailing stacks of product returns back to U.S. retailers after the winter peak shopping season, with the incoming goods totaling 16.6% of total U.S. retail sales, a sharp increase from the 10.6% they returned in 2020, the National Retail Federation (NRF) said today.

The rate of returns for e-commerce purchases was even higher, at 20.8%, but that figure did not increase over past years’ figures, NRF said. And online channels still account for less than a quarter of all sales, with e-commerce sales in 2021 accounting for $1.050 trillion of the total U.S. retail sales figure of $4.583 trillion.

According to a survey released today by NRF and Appriss Retail, the categories with the highest return rates were similar to 2020 metrics: auto parts (19.4%), apparel (12.2%) and home improvement and housewares (tied at 11.5% each).

But while the statistics show that high return rates are here to stay, they also show that many retailers are inefficient in handling the process in a profitable way. For example, one source of loss is fake returns: for every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud, the study found.

In response, the researchers encouraged retailers to use the returns process as a way to connect further with customers and provide a positive experience. “Retailers must rethink returns as a key part of their business strategy,” Steve Prebble, CEO of Appriss Retail, said in a release. “Retail is dealing with an influx of returned items. Now is the time to stop thinking of returns as a cost of doing business and begin to view them as a time to truly engage with your consumers.”

In another measure of the challenge that retailers face, a separate survey found that 80% of retailers say that the cost of managing product returns is “significant to severe.” The major drivers of those spiraling costs were warehouse space and equipment costs (30% of respondents), followed closely by labor costs (26%), according to a recent ReverseLogix research study conducted with Lead to Market.

Companies surveyed said that automation could help reduce that cost, but that they were handcuffed by outdated technology, ReverseLogix, a Burlingame, California-based returns management system vendor, said in the report titled “Frictionless Returns: The Missing Piece of the eCommerce Experience.”

“Nearly three-quarters of respondents say that more automated returns management processes will improve employee and customer experiences, while helping to lower costs,” Gaurav Saran, CEO of ReverseLogix, said in a release. “This includes automated refunds for consumers, developing and optimizing multiple return channels, and automating processes for receiving, inspecting and processing.”

The survey found that the primary solutions used to manage product returns are warehouse management systems (WMS) at 30% and enterprise resource planning (ERP) systems (24%). Only 6% of respondents use the type of purpose-built, end-to-end returns management system that the firm suggests.
 
 

Retail returns increased to $761 billion in 2021 as a result of overall sales growth. https://t.co/HTOzHNxKuh pic.twitter.com/WjVskGG4Sd

— National Retail Federation (@NRFnews) January 25, 2022

According to our study released today, the cost of processing and managing product returns is out of control for #ecommerce retailers.

See what's driving costs and why most companies are failing to contain them...https://t.co/F883vqyQAc #reverselogistics #returns #retail

— ReverseLogix (@reverselogix) January 25, 2022
E-Commerce Logistics
KEYWORDS NRF - National Retail Federation ReverseLogix
  • Related Articles

    U.S. consumers drove retail sales increase in August, NRF says

    Coronavirus could crimp U.S. retail sales for February, study warns

    Report: pharmaceutical distributors saw total sales grow 6.6% in 2020

Ben Ames is Editor at Large and a Senior Editor at Supply Chain Quarterly?s sister publication, DC Velocity.

Recent Articles by Ben Ames

FloorFound lands $10.5 million backing for its large-item returns network

CMA CGM to buy 9% stake in Air France-KLM and operate combined air freight fleet

GXO pairs with investment firm to back logistics tech startups

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Logistics pros warn of business impact from Russia-Ukraine war

  • Container prices continue to drop

  • How to resolve your inventory dilemma

  • Warehouse vacancy rates sink to 27-year low

  • Empty shipping containers stack up at U.S. port depots

Featured Video

Cccb7d13 710a 4473 8132 da8b6cc286f1

The Sportsman's Guide Case study: Increasing Accuracy & Productivity

Viewer Contributed
Thanks to the Lucas Warehouse Optimization Suite, The Sportsman's Guide has increased productivity, reduced training time, and experienced a boost in accuracy for both full-time staff and seasonal employees. Want to learn how Lucas can help your DC be more efficient, accurate, and safe while reducing labor costs?...

FEATURED WHITE PAPERS

  • Omnitracs One – Last Mile Solutions

  • The enterprise shipper's guide to building a smarter truckload RFP

  • Fixed vs. Flexible Automation: Which Option is Better for 3PLs?

  • Enhancing Relationships in Logistics through Data & Collaboration

View More

Subscribe to Supply Chain Quarterly

Get Your Subscription
  • SUBSCRIBE
  • E-NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2022. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing