Retailers are heading into peak season with tighter stock levels, rising fraud risks, and consumers expecting frictionless returns. A new survey by ReturnPro reveals that while companies are tightening policies, the balance between loss prevention and customer experience could define holiday performance.
Inventory Shortfalls Put Pressure on Fulfillment
ReturnPro’s 5th Annual Holiday Returns Report shows 57% of retailers cite low inventory as a moderate-to-severe challenge this season. That shortage, combined with delayed sales launches, only 16% began promotions in August versus 31% last year, means fewer opportunities to spread demand. Instead, most retailers are concentrating deals in September and October, creating sharper spikes in order volume.
Retailers are betting that higher prices, rather than greater sales volume, will drive topline growth, with 52% expecting year-over-year gains tied mainly to pricing. Yet leaner stock levels leave little margin for error: merchandise held back to meet demand can’t easily absorb unexpected surges in returns or replenishment gaps.
Fraudulent Returns Continue to Climb
Three-quarters of retailers report a rise in return fraud during the holidays. The most common schemes involve shoplifted goods, used-but-non-defective items, or purchases made with fraudulent tender. While only 6% now call returns a severe problem, down from 49% in 2023, the shift reflects better fraud controls and digital verification tools, not a decline in risk.
The report highlights that returns remain a strategic lever. Consumers sent back more than $51 worth of goods on average last year, and for many retailers the figure topped $100 per person. Companies that treat returns as part of loyalty and revenue recovery strategies, rather than simply as a cost, are better positioned to retain customers in a competitive market.
Returns as the Next Frontier for Margin Innovation
The overlooked dynamic is that returns are increasingly intertwined with broader supply chain cost structures, from reverse logistics routing to secondary-market resale. Recent trade reports show that retailers reselling returned goods through recommerce channels are recovering up to 60–70% of product value, well above traditional liquidation rates. That shift suggests the real battleground may not be fraud control alone, but how effectively companies convert inevitable returns into margin-protecting assets. For retailers willing to integrate returns into pricing, inventory, and sustainability strategies, the holiday season could mark the start of a more profitable returns economy rather than just another cost cycle.
