Annual refund volumes in the global retail sector increased 18.1% in 2025, while refund value rose 12.7% year-over-year, peaking during the holidays, according to the annual ACI Global E-commerce Report.
Refund activity peaked sharply during the November to December holiday period, accounting for approximately 20% of all 2025 refunds, ACI indicated. December had a 2.89% refund rate, meaning nearly three out of every 100 purchases resulted in a return, and November had a 2.28% refund rate as the average refund rate came in at 2.25% between January and October.
Refund volume gains came amid continued growth in worldwide e-commerce, the global payments company noted. Digital transaction volumes growing by 28.3% in 2025, while total transaction value increased 34.3% year-over-year, driven by shopper demand for convenience, sustained innovation across the retail ecosystem and rising levels of consumer trust.
Although refund rates are rising more slowly than e-commerce transactions, the financial impact they have on retailers remains significant, ACI pointed out. Every $1 million in refunds typically translates into about $1.3 million in total costs when accounting for reverse logistics, inventory depreciation, payment processing fees and fraud-related overheads.
As refund volumes increase, retailers are rethinking their approach to returns and fraud management, ACI maintained. This includes deploying AI-driven identity verification, real-time monitoring and tighter, more adaptive return policies. Merchants are applying real-time analytics traditionally reserved for fraud prevention to refund and return activity as they work to reduce abuse while preserving a frictionless experience for legitimate customers.
“The sharp rise in refund volumes is exposing a growing pressure point for retailers, one that directly threatens margins, especially during peak periods and extended return windows,” said Adriana Iordan, ACI Worldwide head of merchant product management and payments intelligence. “Retailers need smarter, AI‑driven controls that spot abuse in real time and adapt policies dynamically, without adding friction for genuine customers. By bringing fraud and refund management together, merchants can curb losses, protect profitability and still deliver a customer seamless experience even as refund volumes continue to climb.”
