Retail Returns Are Down, But Will Consumers Abide Stricter Return Policies?

According to the National Retail Federation's (NRF) latest report on retail returns, the "2025 Retail Returns Landscape," there are a myriad of complex issues solidifying around polarizing points of view -- one from the consumer end of things, and the other from retailers.

There is one silver lining of note, however: Overall, retail returns are down from a year ago, with estimates showing a total of $849.9 billion in returns expected this year (or 15.8% of annual sales), versus ~$890 billion in 2024 (or about 16.9% of last year's annual sales).

With that being said, a gulf between consumer expectations regarding generous return policies and retailers' willingness -- or perhaps ability -- to continue these policies is heightening. A few of the most pertinent data points follow:

• Return fraud continues to plague retailers' bottom lines. Approximately 9% of returns are deemed fraudulent. Further, nearly half of consumers polled indicated that it was okay to "bend the rules" when returning items, especially if they aren't satisfied with their purchase.
• More than half (57%) of shoppers polled said that they will not shop with a retailer after having been charged for a return. This figure is up substantially from only a year ago, when it stood at 40%. This is concerning, as nearly three-quarters (72%) of merchants surveyed indicated that they have started charging for at least one return option over the course of the past 12 months.
• The next generation of shoppers, namely Gen Z, are more prone to place more returns. Respondents between the ages of 18 and 30 made 7.7 returns of online purchases, on average, over the past 12 months -- more than any other age cohort.
• Despite all of the above, consumers are sticking to their guns when it comes to valuing free returns. A vast majority (82%) said that free returns are an important consideration when shopping online (ticking upward from 76% in 2024), 81% will scrutinize or research a retailer's return policies before placing an order with them (up from 77% last year), and 71% indicated that a poor return experience would dissuade them from doing business with a retailer moving forward (up from 67% in 2024). All in all, this draws a portrait of consumers taking the threatened end of free return policies seriously.

Consumers and Retailers Appear at Odds Over Free (or Generous) Return Policies: Can Either Side Be Satisfied?

As the NRF survey seemingly highlighted, it looks like consumers are digging their heels in when it comes to expectations around the retail returns process.

"Shoppers are more likely than ever to base their repeat purchases on returns experiences. From free return shipping to instant refunds, customers expect a seamless process — and they’re willing to walk away from retailers that fail to deliver," the study authors wrote.

However, with close to two-thirds of consumers (62%) reporting that they'd participated in at least one costly or abusive return behavior -- such as bracketing or wardrobing, or worse, swapping items, sending empty boxes, or similar -- it may come as little surprise that so many retailers are tightening their policies.

"On the one hand, consumers have high expectations, and for the most part want returns to be free, fast, and frictionless. On the other, merchants face rising operational costs, growing fraud exposure, and pressure to protect margins. To navigate this tension, many retailers are reshaping their returns policies. However, some may still run the risk of introducing friction into the customer experience," the study authors added.