Charlotte, North Carolina, December 26, 2025
As the holiday shopping season winds down, customers are facing higher return fees as major retailers adapt their policies in response to surging operational costs and return fraud concerns. With online shopping driving up return volumes, retailers like Sephora and Ulta are shortening return windows and implementing fees for mail-in returns. This shift has prompted significant changes in consumer behavior, with many shoppers opting to avoid retailers that charge for returns. The article explores the implications of these changes for both consumers and businesses amid ongoing economic challenges.
Charlotte, North Carolina – As the holiday shopping season transitions into the period of post-holiday returns, consumers nationwide are encountering a significant shift in retail policies: an increasing prevalence of return fees. This trend, largely driven by the surge in online shopping and its associated costs for retailers, means shoppers may face charges for returning unwanted gifts or purchases, particularly for items bought online and returned by mail. The evolution of return policies reflects a growing tension between customer expectations for free and easy returns and retailers’ urgent need to manage escalating expenses and combat return fraud.
Rising Costs Drive Retailer Policy Shifts
The rise in return fees is a direct response to the considerable financial burden that product returns place on retailers. In 2024, consumers returned close to US$890 billion worth of goods to American retailers, and projections for 2025 suggest this figure could reach $849.9 billion in merchandise, representing approximately 15.8% of annual sales. This is slightly down from 16.9% in 2024. The average cost for a retailer to process a single return for a $100 e-commerce order is estimated to be around $32. This includes expenses for shipping, restocking, and potential loss of value if the item cannot be resold at full price. Some sources estimate the cost to process a returned product can be between 20% and 65% of its original value. Facing these rising operational costs, approximately 72% of merchants surveyed have started charging for at least one return option over the past 12 months.
Common Types of Return Fees and Stricter Policies Nationwide
Return fees primarily apply to online orders returned by mail, with costs potentially reaching as high as $11.99 deducted from the refund of a single item. These charges often cover return shipping labels or restocking fees. Beyond fees, retailers are also implementing other stricter measures nationwide, such as shorter return windows and using anti-fraud tags on apparel to prevent items from being worn before being returned. For example, major retailers like Sephora and Ulta have reduced their return periods from 60 days to 30 days. Some stores, like Saks and Neiman Marcus, have begun charging specific fees for mail-in returns or for clearance items returned after a certain period.
Consumer Impact and Behavioral Changes
The introduction of return fees is significantly influencing consumer behavior. A substantial majority, nearly 9 in 10 consumers, have reportedly stopped shopping with a retailer after it introduced a paid returns policy. Over half of consumers actively avoid retailers that charge for returned items. Despite 82% of consumers considering free returns an important factor when shopping online, retailers are increasingly passing the financial burden to consumers to recoup losses, particularly those tied to return fraud. Furthermore, 81% of shoppers now scrutinize a retailer’s return policy before making a purchase, up from 77% in 2024.
The “Bracketing” Phenomenon and Fraud Concerns
A common practice contributing to high return rates is “bracketing,” where shoppers buy multiple sizes or colors of an item with the intention of returning what doesn’t fit or suit them. This is particularly prevalent among younger shoppers, with 51% of Generation Z consumers admitting to this practice. This behavior, along with “wardrobing” (wearing an item and then returning it), contributes to what retailers term “friendly fraud.” Return fraud is an ongoing concern nationwide, accounting for approximately 9% of all returns. Retailers are observing increases in practices like overstated quantity of returns (71%), empty box returns (65%), and decoy returns involving counterfeit items (64%). Fraudulent returns resulted in $103 billion in losses for U.S.-based retailers in the past year, with 15.14% of all returns marked as fraudulent.
Environmental Repercussions of Returns Nationwide
Beyond the economic impact, the rising volume of returns carries substantial environmental costs nationwide. Transporting returned items generates significant carbon emissions; in the U.S. alone, this accounts for over 15 million metric tons of carbon emissions annually. A large portion of returned merchandise, an estimated 9.5 billion pounds in the U.S. annually, ends up in landfills. This is often because it is more cost-effective for retailers to dispose of items than to process, repackage, and restock them. Between 22% to 44% of returned products never reach another consumer. The greenhouse gas emissions associated with the production and distribution of unused products can be up to 14 times higher than the combined emissions from post-return transport, packaging, processing, cleaning, and reconditioning.
Outlook for Retailers and Consumers
As the peak return period, particularly the last week of December and the first two weeks of January, approaches, retailers are focused on strategies to mitigate these challenges. Many are investing in technologies and systems to streamline reverse logistics and reduce return rates, while also trying to balance cost recovery with customer satisfaction. Consumers, in turn, are becoming more strategic and deliberate in their purchasing decisions, partly aided by AI tools, which has led to incrementally lower rates of return in some segments during the initial holiday shopping season. However, the expectation for easy returns remains high, creating a complex landscape where both retailers and shoppers must adapt to evolving policies and economic realities.
Frequently Asked Questions
What is the primary reason for the increase in return fees?
The primary reason for the increase in return fees nationwide is the considerable financial burden that product returns place on retailers, including rising operational costs for shipping, restocking, and potential loss of value of returned items.
How much merchandise was returned by consumers in 2024?
In 2024, consumers nationwide returned close to US$890 billion worth of goods to American retailers.
What is “bracketing” in the context of online shopping?
“Bracketing” is a common nationwide practice where shoppers buy multiple sizes or colors of an item with the intention of returning what doesn’t fit or suit them.
What is the environmental impact of product returns nationwide?
The environmental impact of product returns nationwide includes significant carbon emissions from transportation, totaling over 15 million metric tons annually in the U.S. alone, and approximately 9.5 billion pounds of returned merchandise ending up in landfills each year.
How are consumers reacting to stricter return policies nationwide?
Consumers nationwide are reacting by stopping shopping with retailers that introduce paid return policies, actively avoiding retailers that charge for returns, and scrutinizing return policies more closely before making a purchase.
Key Features of the Rising Return Fees Trend (Nationwide)
| Feature | Description | Scope |
|---|---|---|
| Primary Driver | Escalating operational costs and financial burden on retailers due to high volume of returns, especially online purchases. | Nationwide |
| Return Volume (2024) | Approximately US$890 billion worth of goods returned to American retailers. | Nationwide |
| Projected Returns (2025) | Expected to be around $849.9 billion in merchandise, representing 15.8% of annual sales. | Nationwide |
| Cost Per Return | Estimated at $32 for a $100 e-commerce order; can range from 20% to 65% of an item’s original value. | Nationwide |
| Types of Fees | Return shipping charges and restocking fees, particularly for mail-in returns. | Nationwide |
| Policy Changes | Shorter return windows and use of anti-fraud tags. | Nationwide |
| Consumer Reaction | Many consumers stop shopping with retailers charging fees; increased scrutiny of return policies before purchase. | Nationwide |
| “Bracketing” Practice | Shoppers buying multiple sizes/colors with intent to return, prevalent among younger generations. | Nationwide |
| Return Fraud Rate | Approximately 9% of all returns are fraudulent, leading to significant financial losses for retailers. | Nationwide |
| Environmental Impact | Over 15 million metric tons of carbon emissions annually and 9.5 billion pounds of returned goods in landfills in the U.S. alone. | Nationwide |
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