Where's the Friction Line When it Comes To Evolving Retail Returns?

With the holiday sales season, and the entire year of 2025, in the rear-view window, new data is coming to light on the current state of retail returns.

As refund volumes (and value) continue to increase significantly year-over-year, according to the latest data provided by ACI's annual Global Ecommerce Report, despite increasingly strict return policies being adopt by retailers writ large, what does this tell us about the mindset and behavior of shoppers in 2026 and beyond?

And although earlier reportage from RetailWire, based on NRF data, suggested that retail returns were declining and that shoppers were becoming adversarial to the end of existing perks (free return shipping, tolerance of bracketing behavior, etc.), ACI's data draws a very different picture.

The top-line results: Refund volumes throughout 2025 trended upward by a notable 18.1% as compared to 2024's figures, while refund value ticked up by a more modest, but still substantial, 12.7% YoY.

“The sharp rise in refund volumes is exposing a growing pressure point for retailers—one that directly threatens margins, especially during peak periods and extended return windows,” Adriana Iordan, head of merchant product management and payments intelligence at ACI Worldwide, said.

“Retailers need smarter, AI‑driven controls that spot abuse in real time and adapt policies dynamically, without adding friction for genuine customers. By bringing fraud and refund management together, merchants can curb losses, protect profitability, and still deliver a customer seamless experience—even as refund volumes continue to climb," Iordan added.

Notable key data points provided by the ACI analysis:

• Refund-to-payment ratios could signal pressure ahead for retailers: With an average of between 2.5% to 3% across 2025, ACI suggested that there was a degree of mounting pressure surrounding omnichannel retail operations. That percentage escalated as the holiday sales season drew nearer, with January through October exhibiting a 2.25% ratio, November 2.28%, and December 2.89%.
• E-commerce is booming: Across all retail sectors measured within the analysis, e-commerce transaction volumes grew by a whopping 28.3% in 2025, with transaction value doing even better, improving by 34.3% over the year.
• Holidays present risk-reward scenario: One dovetailing of the ACI analysis with the NRF data -- November and December account for an elevated rate of returns, unsurprisingly (about 20% of the total year's volume), with longer return windows and elevated potential for fraud singled out as factors.

The authors of the ACI report hinted that the provided metrics signified an opportunity for retailers to both mitigate mounting losses while also acclimating today's (and tomorrow's) shopper to a new refund paradigm -- a balancing act if there ever was one.

"While refund rates are rising more slowly than eCommerce transactions, their financial impact for retailers remains significant. Every $1 million in refunds typically translates into around $1.3 million in total costs once reverse logistics, inventory depreciation, payment processing fees, and fraud-related overheads are accounted for," the authors noted.

"The widening gap between payment growth and refund growth underscores the opportunity for retailers to tighten refund controls without eroding customer experience—particularly during peak periods," they added.