Retailers struggle with soaring online returns, study reveals

My Nguyen

26th Jun 2025

Retailers are offering in-store returns for goods bought online to boost sales and loyalty. But the concept has created some unintended consequences, research has found.

About 43 per cent of US retailers are struggling with the cost and complexity of online returns to stores, according to a new study by Retail Systems Research.

“The ability to accept a return is one thing; the ability to profitably handle that merchandise is far more complex,” said Steve Rowen, managing partner of Retail Systems Research.

Only 17 per cent of shoppers spend more in-store after making a return, and 43 per cent of shoppers are likely to return without making further purchases, contributing to the average return rate for online transactions being three times higher than the return rate for in-store purchases.

The study revealed that approximately 20 per cent of retailers admit that their physical stores do not meet today’s advanced service functions, including order pickup and online returns. This is followed by 41 per cent who said their operations require new in-store sales representative roles and workflows.

The study also found that retailers adopting omnichannel POS systems can cut down the time and cost associated with buy-online, return-in-store transactions, especially during sale seasons when a surge of returns occurs.