How big are retail returns?

The US National Retail Federation expected $849.9 billion of merchandise returns in 2025, or 15.8% of sales. Online purchases are returned more often, at 19.3%, and retailers estimate 9% of returns are fraudulent.

Why returns are rising

Free returns, buying several sizes to try at home, and impulse purchases on social platforms all increase return volumes. Fashion and footwear see the highest rates.

The cost of a return

Beyond the refund, returns bring shipping, handling, inspection and repackaging costs. Some items cannot be resold at full price. Payment fees on the original sale are often not returned when the purchase is refunded.

Return fraud

Common types include returning used items, returning stolen goods, receipt fraud and claiming items never arrived. Retailers fight it with return policies, tracking and linking each return to the original purchase.

How retailers manage returns

• Returns in store for online purchases, which bring traffic and save shipping.
• Exchange or store credit options.
• Clearer product information to reduce wrong purchases.
• Fees for some returns.

What it means for payment operators

For your merchants, returns create refund flows across channels. Referenced refunds linked to the original payment, and reconciliation that matches refunds with sales, help them control costs and detect abuse.