The rise of online refunds and returns is generating additional costs in logistics, fraud, and payment processing, impacting profitability for Latino and global businesses.
The e-commerce boom has driven sales—but it has also increased returns, a trend that is beginning to threaten business profit margins worldwide. According to ACI Worldwide, for every million dollars in refunds, businesses face around $1.3 million in total costs, including reverse logistics, inventory depreciation, payment fees, and fraud-related losses.
In 2025, refund transactions rose 18% globally, while the total value of refunds increased 12.7%. November and December accounted for nearly 20% of all returns, with December reaching a 2.89% refund rate compared with the 2.25% annual average.
“If a purchase costs 10 dolars, processing the return costs three more dollars. You don’t just lose the sale—you also absorb the entire return process,” explained Karen Arroyo, Director of New Business Development at ACI Worldwide.
Beyond operational costs, so-called “friendly fraud”—when a customer returns a legitimate product or disputes a transaction—further amplifies financial pressure, directly affecting the profits of small and medium businesses, including those led by Latino entrepreneurs.
In response to this challenge, companies worldwide are implementing artificial intelligence (AI) and real-time analytics to monitor return patterns, detect potential abuses, and optimize the experience for legitimate customers.
“Some businesses with very flexible return policies end up enabling abuse by certain customers,” added Arroyo. AI helps identify recurring behavior patterns, analyze customer history, and reduce return rates—boosting transaction approvals by up to five percentage points and improving operational efficiency.
The real challenge for businesses is not just selling more but managing what comes back. Implementing technology and strategic policies helps mitigate losses, protect profit margins, and ensure that businesses—especially Latino-owned ventures—can grow sustainably in an increasingly competitive market.
When Customers Walk Away: The Real Cost of Changing Your Product Without Warning
