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Here’s Why Retailers Lose Billions to Returns

Poor quality is the #1 reason customers return purchases.

New research from IHL Group breaks down the reasons behind the annual $642.6 billion retailers lose annually from returns. The number one cause for retail returns is quality; defective or poor-quality items account for $162 billion in returns per year. Check out the top 10 list of reasons below.

  1. Defective/poor quality                                  $162.0 Billion 
  2. Bought wrong item                                        $99.3 Billion 
  3. Buyer’s remorse                                              $88.7 Billion 
  4. Better price elsewhere                                   $83.4 Billion 
  5. Gift returns                                                      $64.1 Billion
  6. Wrong sizing on item                                    $62.4 Billion 
  7. Return fraud                                                    $28.2 Billion 
  8. Didn’t match online description                 $6.1 Billion 
  9. Late delivery of items                                    $4.6 Billion 
  10. All other reasons                                            $43.8 Billion

“While retailers can never completely eliminate returns, there are many areas in which they can improve their customers’ experiences and increase profits by minimizing returns,” says John Squire, president of OrderDynamics, the commerce software firm that commissioned the IHL Group report. “For example, apparel retailers can standardize sizing across brands, offer personalized fit guides and clearly communicate sizes to shoppers in all channels. But retailers need connected data across marketing, merchandising, returns and customer reviews to be able to recognize where these issues exist in the first place.”

The March 2024 Issue

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