Are More Equitable Retail Return Policies Possible, Without Causing Consumer (or Retailer) Angst?

Returns are a pressing pain point in contemporary retail, as CNBC reporter Ana Teresa Solá highlighted, with retailers projecting that nearly 17% of all 2024 purchases would be returned, hitting an average cost of $890 billion, per NRF data.

And now, a new report emerging from the Bank of America Institute is further breaking down consumer behavior related to returns — particularly as it related to higher-, middle-, and lower-income shopper return habits.

Higher-income U.S. households performed the highest percentage of retail refunds (against their own purchases), totaling 5.3% of their purchases thus far in 2025. By contrast, lower-income households exhibited the smallest percentage of retail returns, returning approximately 3.7% of their purchases.

"One explanation for these differences could be the composition of retail spending, with higher-income households spending more on discretionary goods that tend to have higher return rates. But this isn’t the whole story, as we observe higher-income households tend to have higher return rates even within specific retail spending categories. One particularly stark difference between lower- and higher-income groups’ returns behavior is at department stores, where the latter return over 20% of retail spending vs 11% for the former," the report noted.

"Another explanation may be that higher-income households are less cash-constrained and so are more likely to buy items speculatively when they are searching for a particular purchase, in the knowledge they can return it later if they decide it’s not right for them," it continued.

Return Policies Are Tightening Over Costs

According to the NRF findings, in conjunction with Happy Returns, about two-thirds (66%) of retailers have begun charging for one or more return methods. As David Tinsley, lead author of the report and senior economist at the Bank of America Institute, underscored, that's not only coming from the mouths of retail enterprises themselves (“Retailers themselves say it’s a very expensive business," Tinsley stated), but it's also evidenced by the data.

Higher-income U.S. households are purchasing things speculatively from the assumed position that they can always return it later with ease, a practice somewhat akin to bracketing.

"That’s likely to be somewhat easier for someone who has a higher income to do,” Tinsley said.

A second method of curtailing returns, as Edgar Dworsky — a consumer advocate and founder of ConsumerWorld.org — put it, was to abbreviate the return window further.

“We’ve generally seen this over the years. I think back to the old days when you bought something … and you had maybe 180 days or maybe no return limit." Dworsky said.

“One of the ways of cutting expenses is to cut back on the length of return periods,” he added. However, lower-income households may face barriers related to transportation involving a return (either to a physical store or to the post office), or be engaged in unpredictable or excessive shift work stymieing one's ability to spend an hour or more, during hours of operation, to conduct said return.

And while Dworsky indicated, among other avenues, that credit card return protections could also be leveraged if necessary, Solá brought forth a Bankrate report that stated, "Credit card return protection is a notoriously fickle credit card perk that’s increasingly rare." Lower-income shoppers may not be in possession of a credit card, or if they do hold one, their card may be less likely to afford perks related to return protection.