Consumers returned $849.9 billion in merchandise last year, nearly 16% of total retail sales, according to ITF Group’s The Retail Reality Check Report.
What’s more is, the National Retail Federation attributes 9% of that figure to outright fraud, leaving the other 91% of returns with no fraud attached to them at all.
"We've accepted a false premise in this industry, we talk about returns as if they're a customer service issue, something e-commerce has to deal with," says Sam Agyemang, VP of business development at ITF Group. "In reality, many of those returns are symptoms of an execution failure. And it's always upstream."
Key takeaways:
· Details from the report show that retailers typically treat the three pressures -- returns, freight cost, and peak-season readiness -- as separate conversations split across separate departments. A product mishandled in a warehouse or a shipment that picks up too many touches across the supply chain rarely shows up on a return label. It surfaces weeks later, as a percentage, in a different department’s report, disconnected from the freight decision that caused it.
· The report contends that a marginal rate discount from a lower-cost carrier is often a risk transfer rather than a savings, shifting exposure into missed appointment windows, damaged cargo, or returns that never get traced back to the freight decision that caused them.
· The report also points to a recent wave of broker-liability rulings that have raised the bar on due diligence across shippers, brokers, and carriers alike, rather than resting liability with any single party, making carrier vetting a compliance question as much as a cost one.
