A recent ecommerce report from ACI Worldwide, a global payments technology company, found that both refund volumes and refund values are surging. Refunds and returns in general have a huge financial impact on businesses, and many companies are likely to rethink their refund/return strategies in response to this growth.
Refund Volume and Value Rise in 2025
ACI Worldwide’s annual Global Ecommerce Report, which analyzes data from billions of transactions from across the world, found that global refund volumes climbed 18.1% in 2025, while refund values also increased by 12.7% compared to 2024.
While returns can and do happen all year, refund activity reached its peak during the holidays. In fact, November and December alone accounted for around 20% of all refunds throughout the year.
Along with the refund volume and value rising, so are ecommerce transaction volumes and values in general. The volume of ecommerce transactions grew by 28.3% in 2025, with total ecommerce transaction value growing by an even larger 34.3% year-on-year.
The report claims that the drivers of this massive growth include rising consumer trust levels, sustained innovation in the space, and a demand for convenience.
The Financial Impact of Returns on Ecommerce Brands
But while ecommerce transactions are increasing faster than refund rates, refunds still have a huge financial impact on ecommerce retailers. In fact, the report states that every $1 million in refunds generally results in about $1.3 million in total costs, once you account for inventory depreciation, logistics, payment processing fees, and things like fraud-related overheads.
Also, the report mentions that the annual refund-to-payment ratio is between 2.5% and 3%, which means that around three out of every 100 purchases lead to a return. This may not seem like a huge amount, but when many companies have thousands or even millions of sales each year, that 3% represents an enormous amount of returns and refunds to handle.
Also, fraudulent returns and refunds are among the most common types of fraud that ecommerce companies have to deal with.
Ecommerce fraud is a growing problem, and 79% of companies fell victim to a fraudulent attack or attempt in 2024. This fraud is also expensive, as losses to online payment fraud in 2024 were estimated at around $44 billion in 2024, and this number could jump to over $100 billion by 2029.
Retailers Adapting Their Approach to Refunds
As a result of this growth and the high cost of returns and refunds, many retailers are adapting their approaches. Many are using AI-driven identity verification, real-time monitoring of transactions, and tightening up their return and refund policies to reduce the chances of people taking advantage of them.
While often reserved for dealing with fraud, many companies are using real-time analytics to help cut down on refund abuse, while also ensuring legitimate customers can still have a streamlined shopping experience.
Many retailers may even phase out free returns in response to this increase, or be much more strict about their rules surrounding returns in general.
I believe that as refund rates continue to rise, it’s important for all ecommerce brands to rethink their strategies. If you don’t make any changes to keep up with the rising prevalence of returns, customers may continue to take advantage of your weak and exploitable policies.
To make your policies harder for bad actors to exploit, consider defining strict conditions for returns/refunds, keeping your return windows relatively short, charging a restocking fee, and improving the content surrounding your product so people have as much information as possible about what they’re buying before they make a purchase.
