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Key Takeaways
- Returns are costly in both time and money for retailers. Instead of being restocked, many returned items are discarded in landfills or sold on the secondary market.
- Online return rates have almost doubled since 2019, with generous pandemic-era policies contributing to the surge.
Whether you’re purchasing a gift for your child or buying a dress for a work holiday party, you’ve probably bought items only to return them soon after you get them.
While many assume that your purchase just gets restocked afterward, some returned items end up in landfills or are resold at discount stores. This is because returns are costly and time-consuming for retailers, whose workers must reopen the package, inspect it, and then decide what to do with it. The fate of a returned product also depends on the product’s condition.
Why This Matters
Growing return rates raise costs for retailers and contribute to significant waste, ultimately affecting prices and product availability for consumers.
People Are Returning More Items Now Than In The Past
Simone Peinkofer, an assistant professor of supply chain management at Michigan State University, estimates that, on average, a return costs retailers about 60% of the item’s cost.
“About 90.6 billion pounds of waste is generated by product returns. So a lot of it unfortunately ends up in a landfill, but it could also get refurbished or remanufactured,” Peinkofer said. “Or [if] we’re looking at the secondary markets, [retailers] liquidate it, you sell it to someone that takes the return product and resells it on a secondary market.”
The estimated online return rate for all retailers was 15.8% in 2025, costing about $849.9 billion, according to a study by the National Retail Federation—a trade group representing retailers—and Happy Returns, a UPS company. That’s almost double the 2019 rate of 8.1%.
Unsurprisingly, the expected return rate for online sales is even higher: nearly one in five online purchases are predicted to be returned in 2025.
Fast Fact
Nearly half (45%) of shoppers in the NRF survey said it’s acceptable to stretch return policies when you’re unhappy with a purchase, and 62% said they’ve broken such policies at least once.
Why There Are More Returns
One reason returns have spiked is that businesses have been offering more generous return policies since the COVID-19 pandemic.
As many people were stuck at home during the lockdowns, online retailers offered more flexible policies—like free returns with extended return periods—to stay competitive. More than a third (37%) of merchants surveyed by the NRF reported losing customers due to charging restocking fees, and 45% stated that the practice led to increased customer complaints.
Peinkofer said the time of year also affects return policies. With the holiday season upon us, retailers usually offer more lenient policies—but they may not last for long.
“You will see a lot of retailers right now offering 60-day [return periods] because people already bought Christmas presents in October,” said Peinkofer. “They [retailers] are [going to] provide more lenient return policies now over the holiday season, but mid- to end of January, those [policies] are going to get more restricted.”
