Understanding the Impact of Consumer Returns on the Retail Industry

The retail landscape has always been dynamic, but the past year has brought its own set of challenges and insights, especially in the realm of consumer returns.

The “2023 Consumer Returns in the Retail Industry” report sheds light on this critical aspect, offering valuable data for retailers aiming to navigate the complexities of returns management.

Here, we delve deeper into the key findings of the report, exploring the implications for the retail sector.

High Volume of Returns

The industry faced a staggering $743 billion in merchandise returns in 2023, a figure that highlights the scale of the challenge retailers confront.

This high volume of returns not only affects the bottom line but also demands efficient logistics and customer service strategies to handle the return process smoothly.

Retailers are increasingly investing in technologies and policies that can help predict and reduce return rates, such as augmented reality (AR) for virtual try-ons and more detailed product descriptions and images.

Return Rate

With returns accounting for 14.5% of total sales, the data underscores a significant aspect of retail operations that cannot be overlooked.

This rate points to the necessity for retailers to understand the drivers behind returns.

Whether it’s sizing issues, product mismatches, or customer expectations not being met, addressing these factors can lead to more satisfied customers and fewer returns.

Impact on Retailers

The financial impact of returns is profound, with retailers losing $145 million for every $1 billion in sales.

This loss emphasizes the need for a strategic approach to minimize returns, including enhancing product quality, providing accurate product information, and improving customer engagement and support.

Retailers are also exploring restocking efficiencies and secondary markets to recoup some of the losses from returns.

Online vs. Brick-and-Mortar Returns

The disparity in return rates between online (17.6%) and brick-and-mortar purchases (10.02%) reveals the unique challenges of online shopping.

Without the ability to physically interact with products, online shoppers are more likely to return items.

This insight is driving retailers to enhance online shopping experiences through better sizing guides, immersive product visuals, and easy-to-understand return policies to reduce the uncertainty that leads to returns.

Data Analysis and Partnerships

The partnership between NRF and Appriss Retail represents a significant step towards understanding and managing returns more effectively.

By leveraging detailed returns data, retailers can gain insights into return patterns and reasons, enabling them to implement targeted strategies to reduce returns.

This collaboration also highlights the importance of data in shaping retail strategies and improving customer satisfaction.

Methodological Changes

Acknowledging the methodological changes in the 2023 report is crucial for retailers.

It signifies the evolving nature of data analysis in the retail industry and the need for continuous adaptation to glean accurate insights.

Retailers must stay abreast of these changes to ensure that their strategies are informed by the latest and most accurate data.


The “2023 Consumer Returns in the Retail Industry” report offers a comprehensive look at the challenges and opportunities presented by merchandise returns.

By understanding and addressing the factors behind returns, retailers can not only improve their bottom line but also enhance customer satisfaction and loyalty.

As the retail landscape continues to evolve, so too will the strategies for managing returns, driven by data, technology, and a deep understanding of consumer behavior.