US shoppers return $222B a year

Consumers return $642.6 billion worth of goods annually, and the United States ranks as the largest contributor to global returns at $221.7 billion a year.

Looking at this number in another way, the combined total of worldly returns is equal to the combined annual sales of Walmart, Target, Best Buy, Gap and Macy's, MarketWatch reported. In other words, 4.4 percent of the $14.5 trillion in retail sales is returned annually, according to a study by IHL.

Some of the largest categories for returns include clothing, 10 percent, followed by electronics and books, 8.8 percent.

For example, fashion retailer Urban Outfitters (NASDAQ:URBN) reported a 13 percent decline in its most recent quarter due in large part to online-related expenses. According to a regulatory filing, the retailer's reserves that are set aside for returns increased to 4.4 percent of total liabilities, up from 3.6 a year prior.

The problem with returns is that only 48 percent of these items can be resold at full price. And retailers are expecting the number of returns to rise as online sales increase, along with offers of free shipping and free returns. In the United States, free shipping continues to drive purchases—58 percent of online shoppers will add items to their cart in order to qualify for the incentive.

The biggest reasons for returns are items being defective, or poor quality, the wrong size or being priced lower elsewhere. Not to mention, fraud—consumers wearing clothing with the tags still on, then returning them—is behind a growing number of returns. Fraudulent returns in the United States were up 23 percent from 2012 to 2014, according to a National Retail Federation survey.

For more:
-See this MarketWatch article

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