The trend: Online shoppers have held on to more of their holiday purchases so far this season, with return volumes between November 1 and December 12 down 2.5% YoY, per Adobe Analytics. That positive momentum slowed more recently, as return volumes were down just 0.1% in the seven days following Cyber Week.

That’s in line with the broader trendlines. Retailers expect 15.8% of their total annual sales will be returned this year, down from 16.9% a year earlier, per a recent report from the National Retail Federation and Happy Returns. The same report found retailers expected 19.3% of online sales to be returned in 2025.

The caveat: Many returns are still ahead, since the research period ended before Hanukkah and Christmas.

• During last year’s holiday season, one in eight returns took place between December 26 and December 31.
• Adobe expects returns this year to rise 25% to 35% above the November 1 to December 12 period, with rates 8% to 15% higher in the first two weeks of January.

Why is this happening? With margins tightening, online retailers have made a concerted effort to reduce their return rates. One strategy is to help shoppers make informed decisions about the items they’re buying to avoid the types of surprises that can lead to returns. That can include rolling out tools such as virtual try-on, as well as investing in more robust product descriptions, images and videos, and detailed sizing guides.

Another approach—easier to implement but riskier—is adding friction to the return process via stricter policies or fees. While these steps can make consumers think twice before sending an item back, they can also suppress demand.

• For example, the vast majority of shoppers, 84%, say they would stop buying from a favorite retailer if strict return policies were introduced, per Blue Yonder’s 2025 Global Consumer Retail Returns Survey. And roughly three in five US shoppers (59%) hesitate to buy when they expect returns to be difficult.
• Even so, nearly three-quarters (72%) of retailers now charge for at least some returns, up from 66% last year, per the NRF/Happy Returns report. But these policies carry costs of their own: 47% of merchants that began charging return fees report more customer complaints, 37% lost customers, 34% saw average order value decline, and 24% had an overall sales decrease.

Our take: Returns are an inevitable part of shopping. While retailers have good reason to reduce their volume, they need to avoid undermining longer-term demand. After all, 71% of shoppers say a poor returns experience makes them less likely to buy again, up from 67% last year.

Retailers may be better served by investing in tools that prevent returns in the first place—like AR try-on and product videos—and treating returns as a chance to strengthen loyalty and unlock incremental revenues through cross-sell and upsell moments. The upside is clear: 86% of shoppers are more likely to repurchase from retailers that offer free returns and instant refunds at third-party locations.