Optoro’s “2024 Returns Unwrapped” report identifies key returns trends across the shopper experience, fraud and abuse, sustainability, and financial impact for retailers
Washington, D.C. – November 19, 2024 – As retailers prepare for a bustling holiday returns season, Optoro, Inc., the leading technology provider for retail returns, today announced the results of its new “2024 Returns Unwrapped” report. This year, the company predicts $160B in holiday returns.
According to the National Retail Federation, the volume of returns increased from $613.94 billion in returned merchandise in 2022 to $743 billion in 2023. According to Optoro’s new study, 46% of shoppers make returns multiple times a month — a 29% rise from 2023.
With returns now a routine part of the shopping journey, Optoro has identified four key trends influencing shopper preferences and retailer priorities.
54% of retailers are looking for ways to increase the financial recovery from returns
- The cost to return a purchase averages 27% of the purchase price, which erases as much as 50% of the sales margin.
- To offset costs and discourage returns, 63% of retailers currently charge a shipping or restocking fee. Of those that do not have a fee in place, 55% are considering implementing one.
- Fees can threaten loyalty. 58% of shoppers say a shipping or restocking fee is the most frustrating part of returns. Further, 76% of shoppers admit they’ve embellished or exaggerated the return reason to avoid a fee, a 39% increase from 2023.
Return experiences matter. A whopping 80% of shoppers stopped shopping at a retailer because of changes to the return policy—a 34% increase YoY.
- 84% of shoppers have purchased from one retailer over another because of a better return policy, a 20% rise from 2023.
- As omnichannel has blurred the lines between stores and ecommerce, 67% of shoppers prefer to return items they purchased online to a retailer’s store either always or often.
- Despite this preference, offering a frictionless in-store returns experience comes with its own challenges. Long lines are the biggest pain point for 44% of shoppers returning in-store.
- Retailers have come to understand the role returns play in shopper loyalty and cite improving the returns experience as a top priority. Specifically, they’re prioritizing: improving the online returns experience (55%), in-store experience (49%), and omnichannel experience (41%).
Returns fraud and abuse is top-of-mind-for retailers, with wardrobing skyrocketing 38% in 2024.
- Over two thirds (69%) of shoppers admit to wardrobing, or buying an item for a specific reason or event and returning it after use.
- 64% of shoppers who wardrobe do so at least once a month, a 40% increase from 2023.
- 76% of those wardrobing shoppers cite financial motivations.
- Shoppers are most likely to embrace bracketing — purchasing an item in a variety of colors or sizes and then returning unwanted options — when shopping for apparel and accessories (56%).
- Of those who admit to bracketing, 31% say they only do so for major life events, such as a job interview or wedding. Another 31% say they only bracket a few times a year.
- 81% of retailers claim to have a returns abuse mitigation strategy, with bracketing (38%) and wardrobing (35%) as their biggest concerns.
- 39% of retailers have put a returns shipping or restocking fee in place to discourage excessive or abusive returns. Retailers are most likely to consider banning customers with a history of wardrobing (38%) and bracketing (34%).
Sustainability is top of mind for retailers and shoppers, with returns amounting to 8.4 billion pounds of landfill waste in 2023.
- 86% of retailers state that their companies have meaningful strategies in place to minimize the environmental impact of returns.
- These strategies include:
- Offering shoppers the ability to make boxless, label-less returns in-store or at third-party locations (56%);
- Diverting like-new goods to internal or external recommerce channels (54%);
- Consolidated shipping for returns (50%).
- Shoppers have also embraced sustainable practices, with 77% extremely likely or likely to purchase secondhand or open-box goods directly from brands at a discount.
- 46% of shoppers are most willing to embrace recommerce when purchasing luxury items.
“As returns have become an integral part of the shopper experience, retailers must balance meeting sky-high expectations with rising costs, environmental impact, and fraudulent behaviors,” said Amena Ali, CEO of Optoro. “By understanding shoppers’ behaviors and preferences around returns, retailers can create returns experiences that embrace their needs while driving deeper loyalty and protecting their bottom line.”
For full report findings, visit optoro.com
For more information on how retailers can enhance returns for customers and drive repeat purchases please visit Optoro’s Returns Management System.
Methodology
Findings are based on a survey of 573 U.S. consumers and 350 U.S. retail executives, ages 18+.
About Optoro
Optoro software is revolutionizing the retail industry with cutting-edge returns solutions for retailers, brands and third-party logistics providers (3PLs). Optoro’s modular Return Management System (RMS) orchestrates and streamlines return processes from returns initiation to the next customer, helping businesses maximize savings and revenue from every return while maintaining industry-leading customer satisfaction rates and enabling circularity. Optoro’s Returns Portal and robust returns network enhance shopper convenience, reduce returns costs, and increase repurchase rates. Optoro’s Returns Processing software utilizes data and AI to reduce speed-to-stock times, eliminating backlogs. Trusted by the world’s leading retail brands like Gap, American Eagle Outfitters, Steve Madden, and Best Buy, Optoro is the preferred choice for turning returns into a strategic advantage.
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