The Supply Side: Retail returns expected at $890 billion in 2024, up 15%
by January 23, 2025 9:15 am 102 views

The National Retail Federation (NRF) estimates that 17% of items sold in 2024 were returned in 2024, totaling $890 billion, which is 15% higher than the previous year. The trade group said the growing amount of returns presents major challenges for retailers to start 2025.
While returns occur throughout the year, the NRF estimates holiday return rates of 20.4%, higher than the yearly average.
Amena Ali, CEO of returns solution firm Optoro, said the problems with returns won’t soon abate as more shopping gravitates online. Ali said customers became comfortable buying online during the pandemic, and many developed return habits that are excessive by some standards because of easy return policies from retailers.
NRF reports that nearly two-thirds of consumers now buy multiple sizes or colors, some of which they intend to send back — a practice known as “bracketing.” Also, 69% of shoppers admit to “wardrobing” or purchasing an item for a specific event and returning it afterward. The report found these practices have grown from 39% in 2023.
The report found that Gen Z shoppers ages 12-27 are among the most likely to commit return abuse. The report found that half of Gen Z consumers in the survey admitted to returning a worn item, 46% reported returning an item after the return window closed, and 41% said they returned a different item instead of the correct one. Still, 46% of millennials (ages 23-43) and 36% of Gen X (ages 44- 59) said they “sometimes or always” order multiple items of clothes or shoes knowing they will return some of them. With baby boomers over 60, the percentage is 24%.
While some retailers advertise “free returns,” they come at up to 30% of the original item’s cost, Optoro reports. Returns don’t always end up back on the shelf. There is a cost to repackaging, restocking and reselling returned items that sometimes outweighs the value of the goods. In those cases, items can end up in landfills. Optoro estimates returns in 2023 created 8.4 billion pounds of landfill waste.
Amazon will restock some items and sell them as “used-like new” at a slight discount to the brand new item. For instance, on Jan. 7, an 8-foot by 10-foot rug mat sold on Amazon was discounted to $19.99 with the same free delivery promise as the $27.99 never-owned product. Both products also offered free returns.
In other cases, Amazon will tell the customer to keep the product rather than return it. The customer still gets a credit, but this only happens for small inexpensive items. Also, 33% of retailers have a “keep it” policy. Amazon also monitors returns and more recently began requiring customers to provide the packaging of some items when dropping them off at third-party return centers like UPS and Kohl’s stores.
Amazon was not the only retailer to tweak return policies since 2023. NRF said 81% of U.S. retailers adopted stricter policies like shorter return windows or charging a return or restocking fee. While restocking fees and shipping charges may help curb the amount of inventory that is returned, retailers also said improving the returns experience was a key goal for 2025.
Retailers who avoid charging extra shipping and return fees gain a competitive edge, with 51% of consumers indicating they’re more likely to shop again with the merchants, according to survey data from Navar. Having multiple return options influences holiday shopping behavior, with 82% of respondents indicating they are more likely to make online purchases when various return methods are available, Navar reports.
While retailers have typically hired seasonal workers ahead of the holiday, 34% will hire seasonal staff to help process returns, and 40% hire third-party reverse logistics to do so, according to the NRF. Retailers often add staff in warehouses, stores and call centers to process the higher volumes of returns. The report states that while free returns might once have been table stakes for e-commerce, that ship has sailed, with 66% of retailers responding that they’d started charging for at least one type of return method in the previous 12 months.
Salesforce reports online holiday sales soared in 2024, but returns also are skyrocketing. Online U.S. sales for the 2024 holiday season (Nov. 1–Dec. 31) reached $282 billion, a 4% year-over-year increase. Global holiday sales totaled $1.2 trillion, up 3%. However, Salesforce cautions that high rates of online returns may dampen the overall profitability of the 2024 holiday season for retailers. More than $122 billion of global online holiday purchases have already been returned, up 28% from the 2023 holiday season.
Salesforce projects the value of online holiday returns will grow to $133 billion globally, partially due to trending consumer behaviors like buying an extra size above and below your standard size to return two of the items.
“Retailers had a robust holiday season, but a 28% rise in the rate of returns compared to last year is a cause for some concern,” said Caila Schwartz, director of consumer insights at Salesforce. “Retailers who have embraced AI and agents are already seeing the benefits, but these tools will be even more critical in the new year as retailers aim to minimize revenue losses on returns and reengage with shoppers.”
Editor’s note: The Supply Side section of Talk Business & Politics focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics, and is sponsored by Harvest Revenue Group.