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Returns 8 min read 2026-10-17

The Hidden Cost of Clothing Returns

US retailers processed $849.9 billion of returns in 2025, a 15.8% return rate, per NRF and Happy Returns. The 2024 figure was 16.9% and $890 billion, up 21% on the annual average.

The Hidden Cost of Clothing Returns

The headline number

US retailers processed $849.9 billion of returns in 2025, a 15.8% return rate, per NRF and Happy Returns. The 2024 figure was 16.9% and $890 billion, up 21% on the annual average.

Appriss Retail and Deloitte put 2024 lower at 13.2% and $685 billion, so methodologies differ and both circulate.

In 2025, 9% of returns were fraudulent, per NRF. The rest are mostly honest people.

Per-item cost, honestly

Here the sources genuinely conflict. Optoro's own reports variously state 26.5% of returned merchandise value, 27%, a range of 20 to 39%, and 66% for the holiday period which includes labour, transport and warehousing.

Coresight Research, using Optoro's holiday figure, estimated 24.4% of online apparel purchases are returned, implying $38 billion of potential loss on $155 billion of online sales plus $25 billion in processing costs.

Rather than pick one, treat cost per return as somewhere between a quarter and a half of item value depending on category and how aggressively a retailer discounts to recover value.

Be sceptical of any single per-return cost statistic. The vendors publishing them sell returns processing, and their methodologies are not directly comparable.

The environmental number is worse

The European Environment Agency estimates 22 to 43% of returned clothing bought online in Europe is destroyed, and that 4 to 9% of all textile products placed on the EU market are destroyed before use, at 264,000 to 594,000 tonnes a year on a 2020 basis.

Returned goods may travel more than 1,000 km. But only about 3% of textile environmental harm comes from distribution and retail, so the dominant harm is fibre production, not the return journey.

Greenhouse gas emissions from destroying textiles range from 132,000 kg to 5.6 million tonnes of CO2 equivalent, depending on fibre type.

The US picture

Returns accounted for 8.4 billion pounds of landfill waste in 2023, per Optoro. Separately, 85% of unwanted apparel in the US ends up in landfills or incinerators, per the US EPA via USITC, though that figure covers all unwanted apparel rather than returns specifically.

Why it is not simply recycled

Sorted returns require labour and space, and only a fraction qualify. What remains goes to discount, export, or destruction. Many retailers report that only a minority of returned stock is recoverable.

What reduces it

Fitting the customer correctly the first time. That is the only intervention that prevents the return rather than managing it afterwards.

See whether measurements help and why the returns happen.

Frequently asked questions

How much do returns cost retailers?

US retailers processed $849.9 billion of returns in 2025 at a 15.8% return rate. Vendor estimates of per-item processing costs vary widely and conflict, from about 20% to over 60% of item value depending on the measure.

What happens to returned clothes environmentally?

The European Environment Agency estimates 22-43% of returned clothing bought online in Europe is destroyed, and 4-9% of all textiles placed on the EU market never get used.

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