Stop managing the raw retail return rate
Supply Chain Management Review published on 26 August 2026 a contributed analysis by Saurabh Bahree arguing that the raw retail return rate is the wrong metric to manage by. It proposes an Excess Return Ratio, dividing observed merchandise returns by the returns a group's own risk profile predicts, so that a ratio above 1.0 flags abnormal return demand rather than high volume. The piece cites National Retail Federation figures of a projected .9 billion in US retail returns value for 2025 and an estimated 19.3% of online sales returned. It presents the ratio as an investigation signal, not a finding of fault.
- $849.9B Projected US Returns Value, 2025
- 19.3% Of Online Sales Returned
- 1.0 Ratio At Expected Performance
A raw return rate tells an operation how much work is coming back and nothing about whether that volume is normal for what was sold. Risk adjusting it moves the conversation out of reverse logistics and into merchandising, product content, packaging and the carrier, because each excess cluster points at a different owner. For a supplier that means the buyer stops shopping for one returns product and starts shopping across the causes.