When the COVID-19 pandemic locked down millions of Americans last year, online spending soared. E-commerce sales grew approximately 49% year over year, according to a Mastercard SpendingPulse report (which also revealed that online jewelry sales grew roughly 44% in 2020).
Wary of crowds at the mall and in big-box and grocery stores, millions of U.S. consumers chose to buy merchandise almost exclusively online. As a result, consumer returns doubled in 2020, compared to 2019, according to a new report jointly authored by the National Retail Federation and Appriss Retail.
American consumers returned an estimated $428 billion in merchandise in 2020—approximately 10.6% of the year’s total U.S. retail sales—according to the report, which culled the responses of 62 American retailers. Of those returns, roughly 5.9% ($25.3 billion) were fraudulent, meaning a theft occurred through the return process. For every $100 in returned merchandise accepted, retailers lost $5.90 to return fraud.
The rise in returns has everything to do with how much more consumers are shopping online. The rate of returns is in line with 2019’s rate, but e-commerce accounted for a whopping $565 billion (14% of total U.S. retail sales) last year. For every $1 billion in sales, the average retailer incurred $106 million in merchandise returns.
More than one-fifth of returns were completed through credit cards; cash accounted for 12.7%, and debit cards, 7%. The most returned categories include auto parts (19.4%), apparel (12.2%), home improvement (11.5%), and housewares (11.5%).
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