2024 holiday season has brought positive sales figures, with US consumers spending a record $13.3 billion online on Cyber Monday alone, marking an increase from the previous year. Where consumer saving experts are promoting “slow shopping” —intentional buying decisions rather than buying on impulse— returns this season are projected to account for approximately 17% of total retail sales by the end of 2024, totaling $890 billion in returned goods. To add perspective, only 20 countries in the world have a GDP more than that. 

This trend is particularly pronounced during the holiday season, where return rates are estimated to be 20.4%.  Emerging consumer habits like “bracketing,” (purchasing multiple sizes or colors of an item with the intention of returning the ones that don’t meet their preference) and “wardrobing,” (buying items for specific events and returning them afterward) are adding pressure on retailers. 

Beyond financial costs, returns pose enormous environmental concerns. The transportation and processing of returned goods contribute to carbon emissions, and a significant portion of returns end up in landfills, exacerbating environmental degradation. Returns in 2023 created 8.4 billion pounds of landfill waste, according to Optoro.

Available technology solutions can consolidate individual returns into bulk shipments that are pre-verified and simplify return processes for vendors. Other AI solutions can be leveraged to manage and reduce return rates. Consumers also play a critical role in this equation. By making more thoughtful purchasing decisions and reducing unnecessary returns, shoppers can contribute to both financial and environmental sustainability. It’s a tightrope for retailers to balance customer satisfaction with the need to mitigate the financial and environmental impacts of returns. As individual consumers, it’s important we play our part in it. 

Returns are an $890 billion problem for retailers...

https://www.nbcnews.com/news/us-news/retail-returns-890-billion-problem-rcna183359