Study finds $796bn total retail loss for retailers in 2025

Core Insights - The report highlights that merchandise returns accounted for $706 billion in losses last year, with preventable loss from fraud and abuse reaching $100 billion, which is 14.2% of all returns [1][2] Returns-Related Loss Breakdown - Returns abuse constituted 12% of returns-related losses, while fraud accounted for 2% [2] - Shrinkage added another $90 billion in losses, primarily due to employee theft ($26 billion), inventory errors ($19 billion), operational errors ($12 billion), and organized retail crime ($9 billion) [2] Retailer Strategies and Insights - Appriss Retail CEO emphasized that returns significantly impact retailers' financial performance, urging leaders to adopt a Total Retail Loss perspective and collaborate across functions to mitigate losses [3] - The report indicates that fragmented data results in billions in losses, with cross-channel fraud from buy online, return in-store (BORIS) transactions leading to a $4 billion loss [3] Return Channels Analysis - Different return channels contributed variably to total returns: buy in-store, return in-store transactions generated $367 billion (52%); buy online, return in-store accounted for $208 billion (29%); and buy online, return online made up $131 billion (19%) [4] Consumer Behavior and AI Insights - Data analytics and AI can effectively identify and warn customers exhibiting abuse patterns, with 90% of consumers willing to repurchase after receiving a warning, potentially saving retailers $75 billion in retained revenue [5] - A significant majority of consumers (80%) desire transparency in AI return decision-making, while 71% trust human associates more than AI for approvals [5] - Retailers that centralize omnichannel data and maintain clear communication can utilize AI tools to identify abusive patterns and manage returns without negatively affecting loyal customers [6]