Appriss Retail has released its annual 2024 Consumer Returns in the Retail Industry Report, in collaboration with Deloitte. The research shows that total merchandise returns for the year reached $685 billion, representing 13.21% of total retail sales, which amounted to $5.19 trillion in 2024.
The report reveals that fraudulent returns and claims resulted in a $103 billion loss for retailers in 2024, with 15.14% of all returns deemed fraudulent. This means that a customer attempted to return an item to a retailer for a refund, knowing the item did not qualify for a refund according to the store’s policy.
The Appriss Retail research highlights that, despite growing efforts by retailers to curb retail returns fraud through stricter returns policies, the problem remains prevalent. The report includes insights on the leading types of return fraud and abuse reported by retailers in 2024, including:
- 60% of retailers surveyed reported incidents of “wardrobing,” or the act of consumers buying an item, using the merchandise, and then returning it.
- 55% cited cases of returning items obtained through fraudulent or stolen tender, such as stolen credit cards, counterfeit bills, gift cards obtained through fraudulent means, or fraudulent checks.
- 48% of retailers faced occurrences of returning stolen merchandise.
The report, now in its seventh year, examines data from more than 60 leading US retailers, the US Census Bureau, and a Retail Dive survey of 150 retail executives and 1,000 consumers.
“Returns are a significant cost for retailers, and the rise of online shopping could increase this trend,” said Kevin Mahoney, managing director of retail at Deloitte Consulting LLP. “As retailers implement policies to address this issue, they should avoid negatively affecting customer loyalty and retention. Effective policies should reduce losses for the retailer while minimally impacting the customer experience. This approach can be crucial for long-term success.”
To learn more, download the report.
