What: The annual NRF report on returns shows that the phenomenon is amplifying.

Why it is important: US customers are increasingly resorting to frauds such as “bracketing” (ordering many sizes and keeping only one) and “wardrobing” (wear a product once and send it back).

In 2023, US retailers faced $743 billion in merchandise returns, representing 14.5% of total sales. Online purchases had a higher return rate at 17.6%, compared to 10.02% for physical store returns. Retailers are actively seeking ways to reduce these figures, particularly to combat return fraud, which accounted for $101 billion in losses. For every $100 in returns, $13.70 is lost to fraud.

Efforts to minimize losses include detailed product descriptions online, strict receipt requirements, and policy changes to limit return flexibility. Nearly half of the retailers reported experiencing 'wardrobing' (returns of used, non-defective items), and a significant number faced returns of stolen merchandise or items bought with fraudulent methods.

Retailers are also contending with a new category in online returns: claims and appeasements for issues like missed or damaged deliveries, a rapidly growing area for return fraud. The holiday season, a peak sales time, sees a slight increase in return rates, with a notable portion of these returns expected to be fraudulent.

The NRF issues its 2023 report on returns and frauds in the US