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January 26, 2022

US retail returns rose to $761bn in 2021

US retailers expect more than US$761bn in merchandise sold last year to be returned by consumers as a result of overall sales growth.

By Beth Wright

The returns figure accounts for an average of 16.6% of total US retail sales, which soared to $4.583 trillion in 2021, according to a new report released by the National Retail Federation (NRF) and Appriss Retail.

“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,” says Mark Mathews, NRF’s vice president of research development and industry analysis. “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.”

The 2021 total rate of returns (16.6%) is up from 10.6% during 2020, but online returns are in line with recent years at an average of 20.8%. According to NRF, online sales accounted for $1.050 trillion of total US retail sales last year. About $218bn of online purchases were returned, with $23.2bn (10.6%) deemed fraudulent.

According to the survey, for every $1bn in sales, the average retailer incurs $166m 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 2020 metrics: auto parts (19.4%), apparel (12.2%) and home improvement and housewares (tied at 11.5%).

“Retailers must rethink returns as a key part of their business strategy,” notes Steve Prebble, CEO of Appriss Retail. “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.”

Earlier this month, NRF said retail sales during the November-December holiday season reached a total $887bn, exceeding its forecast of up to 11.5% growth.

On average, retailers expect 17.8%, or $158bn, of merchandise sold during the holiday timeframe to be returned.

The survey of 57 retailers was conducted by NRF and Appriss Retail on 13 October to 15 November.

Click here to view the full survey results.

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