Retailers estimate that 15.8% of their annual sales will be returned this year, totaling $849.9 billion, according to the 2025 Retail Returns Landscape report just released by the National Retail Federation and Happy Returns, a UPS company. That’s down from 16.9% last year, when returns totaled $890 billion.
While overall return rates may remain steady, some areas are facing more pressure than others. For instance, an estimated 19.3% of online sales will be returned in 2025. Additionally, as Gen Z’s influence grows, so does their impact on returns. Those between the ages of 18 and 30 made 7.7 returns of online purchases in the last 12 months, on average, more than any other generation.
The study also found consumer expectations are increasing around returns. Free returns are a major draw for shoppers, with 82% citing them as a major consideration when making a purchase, up from 76% last year. Consumers also value immediacy, with 76% saying they are more likely to choose a return option that provides an instant refund or exchange.
Still, a poor returns experience can deter future purchases. About 71% of consumers say they are less likely to shop with a retailer again after a poor experience, up from 67% in 2024. And four out of five said they will share their negative experience with friends and family, potentially amplifying the impact.
“Returns are no longer the end point of a transaction,” NRF Vice President of Industry and Consumer Insights Katherine Cullen said. “They provide an opportunity for retailers to create a positive experience for customers and can translate to brand loyalty. Retailers are constantly evolving and working to meet customer expectations, and they recognize the importance the returns process plays.”
NRF and Happy Returns, a UPS company, conducted two surveys this summer to understand the dynamics of online returns from both consumers and ecommerce professionals. The first survey included responses from just over 2000 consumers who had returned at least one online purchase within the past 12 months. The second survey engaged 358 professionals involved in ecommerce for large (over $500 million in revenue) U.S. merchants.
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