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Shoppers with higher incomes are more likely to return retail purchases they make, a new report finds.
Higher-income households had the highest percentage of retail refunds, at 5.3% of their purchases in 2025, according to a recent report by the Bank of America Institute that compared higher-, middle- and lower-income shopper return behavior. The analysis is based on aggregated, anonymous transaction data from U.S. debit and credit card holders who made at least five transactions per month.
Lower-income households had the smallest percentage of retail refunds at around 3.7% of their purchases, according to the report.
Higher-income shoppers are less cash-strapped than lower earners, the report notes, so they are more likely to “buy items speculatively,” especially if they know they can “return it later if they decide it’s not right for them.”
This behavior is similar to what shopping experts call “bracketing,” or the act of ordering multiple products in different sizes, colors or variations with the intention of keeping a few and returning the rest.
“That’s likely to be somewhat easier for someone who has a higher income to do,” said David Tinsley, lead author of the report and senior economist at the Bank of America Institute.
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Bracketing is not really new, said Edgar Dworsky, a consumer advocate and founder of ConsumerWorld.org.
“It’s really been around as long as the internet has been around,” Dworsky said. “Unlike walking into a department store — going into Macy’s and trying on something there, or seeing things in person — you’re buying much more blindly online.”
More shoppers are making more frequent returns. Nearly half, or 46%, of consumers return purchased items multiple times a month, according to a 2024 report by Optoro, a returns solutions company. That’s a 29% jump from 2023.
While consumers value the ability to return products, experts say retailers have been tightening their return policies in recent years to mitigate the high costs.
Why return policies are tightening
The ability to return unwanted purchases is important for consumers.
About 76% of surveyed respondents consider free returns important when deciding where to shop, per a 2024 report by the National Retail Federation and Happy Returns, a returns shipping company.
Nearly as many respondents, 67%, stated that a negative return experience would deter them from shopping with a retailer again.
The survey polled more than 2,000 consumers who had returned at least one online purchase in 2024, and 249 e-commerce and finance professionals from retailers with at least $500 million in revenue.
Despite shoppers’ desires, returns can be costly for retailers. In 2024, retailers expected that about 16.9% of their annual sales would be returned, reaching a total cost of $890 billion for the industry, according to the report.
“Retailers themselves say it’s a very expensive business,” Tinsley said.
To offset the costs, companies have tightened their return policies in recent years. NRF and Happy Returns found that about 66% of retailers began charging for one or more return methods in 2024.
Another way for businesses to cut back on costs is by shortening the window consumers have to make returns, said Dworsky.
“We’ve generally seen this over the years,” he said. “I think back to the old days when you bought something … and you had maybe 180 days or maybe no return limit.”
As tariffs, or taxes on imported goods, increase the cost of products, companies may look for ways to tighten return policies even further to cut down on expenses, Dworsky said.
“One of the ways of cutting expenses is to cut back on the length of return periods,” he said.
What to consider before you go shopping
To avoid going through the hassle of returning a product, Dworksy said it’s important to understand what you’re buying ahead of time.
One way to do that is by checking online reviews from customers who recently purchased the item. Some retailers, like Amazon, will flag whether shoppers tend to keep or return certain products, which can help a prospective buyer gauge the quality of the piece.
Dworksy recommended checking a retailer’s return policy before making a purchase, especially if you think there’s a chance you won’t keep the item. Also look for businesses that offer more flexible terms, he said.
A 2024 report by GoDaddy found that 77% of shoppers check the return policy before making a purchase. The site polled 1,500 consumers last September.
For additional protections, it can be helpful to use a credit card for the transaction, said Dworsky.
Credit cards can offer several kinds of return protections that help cardholders in different ways, such as extending the time a consumer has to return an item or providing the opportunity to dispute charges and get a refund, per Bankrate.
However, make sure to review the fine print on your card and what terms may apply.
“Credit card return protection is a notoriously fickle credit card perk that’s increasingly rare,” notes the Bankrate report.
Correction: This article has been revised to reflect that the percent of consumers who returned items multiple times a month in 2024 rose 29% from 2023. A previous version misstated the 2023 rate. This article was also revised to reflect that retail returns in 2024 were projected to total $890 billion. A previous version mischaracterized the figure.