Consumer Product Returns: High-Frequency Tracking Using Transaction Data

Abstract

Consumer goods returned for reimbursement lead to additional costs to retailers and suppliers, as well as important environmental costs. However such evidence as exists on the scale of the problem comes primarily from surveys of individual retailers or trade associations, generally at low frequency. This article combines high-frequency individual purchase and reimbursement transactions made by credit or debit cards and an original empirical strategy, to estimate the effects of online shopping and the shock of the COVID-19 pandemic on consumer product returns in the short and the medium term. We produce estimates of weekly and annual reimbursement rates for online and in-store sales over a six-year period (2018-2023), and for types of product of particular interest. We find evidence of some lasting changes in online return behavior for durable goods that may have detrimental consequences.

Keywords: e-commerce, environmental impact, ESG, product returns, online purchases, reimbursement, transaction data