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U.S. shoppers are on track to send back $849.9 billion in merchandise in 2025, about 15.8% of everything retailers sell, according to the National Retail Federation and Happy Returns. Here is the part that does not add up: That rate barely moved from last year's 16.9%. Returns are not spiking. So why are retailers ranking "reduce return rates" among their top goals for 2026?
The answer is hiding where returns happen and how many of them are honest.
Online Orders Come Back at 19.3%
Pull the online channel out of the average and the picture sharpens. NRF estimates 19.3% of online sales will be returned this year, well above the blended rate. And one group leans in harder than the rest: Shoppers ages 18 to 30 made 7.7 online returns over the past 12 months on average, more than any other generation.
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Free shipping both ways explains a lot of it. Some 82% of shoppers now say free returns factor into what they buy, up from 76% a year earlier. When sending something back costs nothing, ordering three sizes to keep one, a practice the industry calls bracketing, stops feeling wasteful and starts feeling routine. "Returns are no longer the end point of a transaction," said NRF's Katherine Cullen.
Nearly 1 in 10 Returns Is Fraudulent
The numbers get less flattering from here. About 9% of all returns are fraudulent, and retailers that track the problem say it is rising across several tactics: overstated return quantities (71%), the empty box or "box of rocks" (65%), and decoy returns using counterfeit goods (64%).
Shoppers are not shy about it. Close to two-thirds admit to at least one costly returns behavior, from wardrobing to shipping back the wrong item on purpose. And 45% think bending the truth is fair game when they are unhappy with a purchase. Spread those small dishonesties across billions of transactions and the cost to margins turns real.
64% of Merchants Are Overhauling Returns Within Six Months
Every returned item has a second life the customer never sees. It has to be received and inspected, then either restocked, resold at a discount, or written off, all while the system keeps an accurate count of what is available to sell. Get that wrong and a retailer either oversells stock it does not have or buries good inventory it forgot came back.
That back-of-house reality is why 64% of merchants say updating their returns process within six months is a priority, and 85% already use AI to flag fraud. Warehouse management platforms sit at the center of the fix, tying order fulfillment, RMAs and credit returns, pick-and-pack, and multi-location stock into a single ledger so a wave of returns does not turn into an inventory guessing game. Fishbowl's warehouse-management system is built for that reconciliation work, the unglamorous receiving-and-restocking layer that decides whether a return costs a retailer a little or a lot.
The holiday season raises the stakes. Retailers expect 17% of holiday sales to come back, and they are staffing accordingly: 49% are leaning on third-party logistics partners, 43% are hiring seasonal returns help, and 37% are extending return windows.
The Return Counter Moved to the Warehouse
Returns used to be an afterthought, a service desk and a restocking shelf at the back of the store. Now they are part of the product itself. Shoppers decide what to buy based on how painlessly they can send it back, which turns the reverse supply chain from a hidden cost center into a piece of the brand promise.
The math for 2026 is straightforward even if the fix is not. Expectations around free, fast returns are locked in, and fraud is not going away. The retailers that treat the warehouse dock as seriously as the checkout page will be the ones that keep $850 billion in annual returns from quietly eating their profits.
