U.S. retailers are bracing for more returns than usual, adding stress to an industry already grappling with increasing labor costs and supply chain issues.

Shoppers are expected to return more than $761 billion in merchandise sold last year, representing about 16.6% of total U.S. retail sales, according to a new survey of retailers. That’s up from 10.6% during 2020.

Fraudulent returns, which include counterfeit receipts and when a customer returns something after using it, were among the main challenges cited by those surveyed. They also noted logistics costs, inventory-tracking headaches, shipment delays and the hassle of sending products back to warehouses.

“This all has a dramatic impact on retailers,” said Mark Mathews, vice president of research development and industry analysis for the National Retail Federation, which conducted the survey. “Retailing is a slim-margin business, so it’s problematic when you see returns this high.”

NRF and Appriss Retail polled 57 retailers from Oct. 13 to Nov. 15. Categories with the highest rates of returns were similar to 2020, led by auto parts, apparel, home improvement and housewares.

About 21% of merchandise sold online is expected to be returned, in line with recent years. Online shoppers are more likely to buy multiple sizes and styles of a product because they don’t get the chance to test it in person first. 

Mathews said in-store returns might be going up because customers have become more comfortable visiting stores in-person during the pandemic. In addition, more physical shops are open compared with during 2020, when COVID-19 sparked closures and occupancy limits for businesses in some cities.

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