I don’t know about you, but I find it astounding (but not surprising) that Americans were that unhappy with what they purchased or were gifted in 2020. So unhappy that they returned a whopping $428 Billion worth of merchandise. That’s according to the National Retail Federation’s press release, “$428 Billion in Merchandise Returned in 2020.” Here is how the NRF puts it:
Consumers returned an estimated $428 billion in merchandise to retailers last year, approximately 10.6 percent of total U.S. retail sales in 2020. Of those returns, roughly 5.9 percent were fraudulent, equating to $25.3 billion, according to a report released today by the National Retail Federation and Appriss Retail.
To show you how big just the $25.3 Billion in fraudulent returns were, you just have to compare it to total U.S. toy sales, which were $20.9 Billion in 2019 (2020 figures have not yet been released at the time of this writing). When the comparison is made, you find that the 2020 returned goods’ value was 20% higher than all of the toys purchased in 2019. To put it another way, that $428 Billion in returns was twenty times higher than all the toy purchases put together.
According to the NRF, “for every $1 billion in sales, the average retailer incurs $106 million in merchandise returns.” Although that seems like a daunting number to me, retailers see returns as an opportunity.
Mark Mathews, NRF’s vice president of research development and industry analysis. “Retailers view the return process as an opportunity to further engage with customers, as it provides additional points of contact for retailers to enhance the overall consumer experience.”
The toy industry’s good news is that we are not among the category of products that suffer the most returns. That dubious honor belongs to automotive, apparel, home improvement, and housewares. The toy industry does an excellent job of avoiding buyer’s remorse with its consumers and end-users.
Still, $428 Billion is a lot of returns.