Consumer Behavior

Retailers loss from returns, shrink in 2025 hit $796B

Generated by AI/Adobe Stock

February 24, 2026

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The total retail loss due to shrink, fraud, returns abuse and operational leakage totaled $796 billion in 2025, according to Appriss Retail's "The 2026 Total Retail Loss Benchmark Report," that evaluated returns and shrink from both the consumer and retailer perspective.

The report noted 21% of retail loss is preventable, including $86 billion lost to returns abuse. The study polled more than 1,000 consumers and analyzed in-store and online returns across 250 million unique customer identifiers, according to a press release on the findings.

Additional findings include:

$706 billion in total merchandise was returned in 2025; of that total, 14.2% or $100 billion was preventable loss from fraud and abuse.
12% of returns-related loss was attributed to returns abuse, while fraud made up only 2%.
$90 billion in losses due to shrink, 73% of which was preventable due to employee theft ($26 billion), inventory errors ($19 billion), operational errors ($12 billion), and organized retail crime ($9 billion).

"Returns overwhelmingly power the majority of financial loss that retailers endure," Michael Osborne, Appriss Retail CEO, said in the release. "Every dollar lost to returns is a dollar straight off the bottom line. To stop the bleeding, leaders must look at returns, fraud and shrink through the lens of Total Retail Loss, build a system of collaboration, and implement cross-functional muscle. Retailers that continue to work in silos will continue to erode profits."

Retailers lost $4 billion to cross-channel fraud from BORIS (buy online, return in-store).