Retailers and the Ghost Economy:
The Haunting of Returns

Consumers return a staggering $642.6 billion worldwide of merchandise annually. Unfortunately, many of these products cannot be resold at full price or resold at all. This leads to significant margin erosion for retailers, according to the recently released “Retailers and the Ghost Economy: The Haunting of Returns,” an IHL Group report, commissioned by DynamicAction. It’s a first-of-its-kind report that details the causes and financial impact of merchandise returns in retail and suggests ways retailers can improve processes and technologies in order to reduce returns.

Quality/product defects are #1 cause of returns

The report found that quality problems/product defects are the leading cause of retail returns and account for $162 billion in returns worldwide—representing 1 in 4 retail returns and 1.1% of total retail sales worldwide. Apparel retailers are haunted by returns based on sizing issues, with $62.4 billion in returns attributed to poor fit.

Download the second in a series of four IHL reports for free (normally up to $2,000) and find out how the average retailer can prevent up to half of all returns.


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