Question of the Day: What percent of online purchases are returned to the retailer?

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Jan 11, 2022
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Question of the Day, Budgeting, Behavioral Finance

After the holiday season comes the returns. 

Answer: 18%

Questions: 

  • Have you (or someone you know) ever returned something that was purchased online? If so, why? 
  • What items do you think are most likely to be returned? least likely?
  • While it is "FREE", what do you think are the costs involved for the retailer? Who is picking up these costs if they are "FREE" to you?
  • What are steps that you can take to avoid returning items you bought online? 

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (WSJ):

The percentage of merchandise returned has edged higher during the Covid-19 pandemic, in large part because online sales have return rates that are two to three times higher than sales at bricks-and-mortar stores, according to Pete Madden, a director in the retail practice at consulting firm AlixPartners. Roughly 18% of online sales are returned, according to a 2020 survey conducted by the National Retail Federation and Appriss Retail. The same survey found that 11% of total retail sales were returned in 2020, a bump from the 8.1% recorded in 2019.

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Want to learn more about what drives customer returns and what can reduce their incidence? This Consumer Survey: Returns in Retail in 2021 report has all the answers. 

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Did you miss NGPF's "Best of..." series in December? Here are some of the highlights:

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Returns are not really free as you will discover in this Planet Money podcast, No such thing as a free return. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.