HomeBlog $86 Billion in Returns: US Online Shopping Return Costs Outweigh Defense Budget
$86 Billion in Returns: US Online Shopping Return Costs Outweigh Defense Budget
Online shopping is a breeze, but returning items? Not so much. While sending items back is as easy as clicking a button, it comes with some serious hidden costs for both retailers and the environment. Retail marketing strategies are evolving to handle these challenges, with businesses needing to adopt better systems for managing returns and reducing costs. This article dives into the key statistics surrounding return behaviors, financial impacts, and environmental consequences, urging a shift toward more sustainable shopping practices.
Exploring Return Personas: The Different Types of Serial Returners
Bracket Shoppers: 42% of online shoppers buy extra sizes or colors with the intention to return the items they don’t need.
Wardrobers: 16% of shoppers purchase clothes or shoes for short-term use (e.g., for a social event) and then return them.
Stagers: 16% of shoppers buy clothes to show off on social media before returning them.
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The Financial Toll of Online Returns on Retailers Worldwide
$35 billion in online returns is expected in the UK in 2024, with $8.5 billion due to serial returners (bracket shoppers and wardrobers).
25% of UK online orders are returned.
3.5 billion products are returned every year in the US.
The total value of returns in the US in 2022 was $86 billion, surpassing the US defense budget.
Americans return about 20% of their online purchases annually.
India witnesses 30% returns during the festival season.
50% of returns in India are clothing, and 35% are shoes.
Germany leads the world in returns with a 52% return rate.
Environmental Costs of Online Returns: Waste and Carbon Footprint
Online Returns Generate 5 Billion Pounds of Waste Annually The Weight of Two Empire State Buildings.
In the US, 16 million tons of carbon emissions are produced yearly due to returns, which is equivalent to the emissions of 3.5 million cars on the road for a year.
Unpacking the Reverse Supply Chain: The Costs and Challenges of Processing Returns
The reverse supply chain industry is worth $627 billion and is responsible for processing product returns. To put it in perspective, that’s enough to provide $1,900 to every person on Earth.
Many returned products, even if seemingly in perfect condition, are discarded by retailers due to logistical difficulties, such as missing packaging or small damages.
Conclusion: The True Costs of Online Returns
Online returns not only affect retailers financially but also contribute significantly to environmental harm. The hidden costs of returns ranging from waste to carbon emissions highlight the importance of more sustainable shopping practices, better return management strategies, and better ways to save money.
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