5 things every business should know about returns in 2025 and beyond

For consumers, returns can be a post-purchase chore – but for businesses, they’re a strategic moment to make or break customer loyalty. It’s a point driven home by the 2025 Returns Landscape report, a joint effort between UPS company Happy Returns and the National Retail Federation (NRF). With insights from 2,000+ consumers and 350+ e-commerce professionals, the study reveals just how much returns are reshaping retail.

Here are five things every business should know:

1. What’s in store for returns in 2025?

Retailers estimate 15.8% of total annual sales will be returned this year, totaling nearly $850 billion. This volume represents a continued test for operations, logistics and customer service teams alike. That’s why it’s best to choose a team with a proven track record … *hmm* like the most reliable holiday shipper for seven years in a row?

2. How do return policies influence buying decisions?

Shoppers are doing their homework. About 81% of consumers read return policies before making a purchase, and 71% say a poor returns experience will make them less likely to shop with a retailer again.

“Returns are no longer the end point of a transaction. They provide an opportunity for retailers to create a positive experience for customers and can translate to brand loyalty,” said NRF Vice President of Industry and Consumer Insights Katherine Cullen.

3. How can businesses fight return fraud?

About 9% of all returns are classified as fraud, like empty boxes, price switching and label tampering. Retailers are turning to technology for help, with 85% reporting they’re using AI to detect or prevent return fraud.

Happy Returns helps stop fraud before it starts with item verification at drop off. Each return is scanned and confirmed before entering the network — protecting retailers from some of the most common types of return fraud.

4. What do consumers want from their returns experience?

Convenience is king – consumers want returns to be fast, free and frictionless.

• 86% prefer no-box, no-label returns with instant refunds
• 82% rank free returns as their top priority

Businesses offering these perks are more likely to win repeat customers and positive word-of-mouth. And did you know? With Happy Returns, your customers can do box-free, label-free drop-offs at thousands of locations across the U.S., including 5,400+ The UPS Stores.

5. What’s next for retail returns?

Retailers know returns are both a challenge and an opportunity. In fact, 64% say upgrading their returns capabilities within the next six months is a priority.

“Returns have transformed into a strategic touchpoint for retailers, influencing how younger consumers shop,” said David Sobie, co-founder and CEO of Happy Returns. “To stay competitive, retailers must modernize their reverse logistics to enhance customer satisfaction, reduce fraud and safeguard their operations in today’s high-pressure retail landscape.”

Want to dive deeper into the data? Download the full report here.