Returns in the retail industry have always posed a challenge. A report from Statista estimated 2020 return delivery costs at $550 million, up 64% since 2017. Those are just costs incurred by the purchaser, which do not include the processing, restocking and reselling costs incurred by the seller.
The rise of ecommerce as a percentage of overall retail sales is a major factor in the increasing rate of returns, which by some estimates account for roughly 10% of in-store purchases but 40% of online purchases. In addition, the past decade has seen returns baked into the business model of several direct-to-consumer starts-ups, including Warby Parker, Stitch Fix and Zappos.
