Returns Are Like Standardized Tests

We’ve all gone through the process at least once. And retailers are like our grad-school friends – they’ve gone through the process a lot.

In fact, retailers expect more than $761 billion in merchandise sold last year to be returned by consumers, according to a recent report from the National Retail Federation and Appriss Retail. For context, the US spent $741 billion on national defense in 2021.

↩️ 📦 By the numbers… When combining online and in-store sales, 16.6% of all items bought last year were returned, up from 10.6% in 2020.

• The three categories with the highest return rates were auto parts (19.4 percent), apparel (12.2 percent) and home improvement and housewares (tied at 11.5 percent).
• ~21% of all online purchases were returned last year, about in-line with 2020.
• For every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud.

📸 The big picture: Once the unwanted item leaves your hands or house forever, the company receiving it traditionally has three options: SITT (straight-into-the-trash), BIBBI (burn it, baby, burn it), or SELL it on the $688 billion secondhand market.

• On the consumer side, a 2018 survey found 96% of online shoppers would come back to a retailer if they had a good returns experience. 69% were deterred from buying if they knew they’d have to pay for return shipping.