Holiday Shopping Takeaways: Return Policies Under Pressure

Spring is a good time for tax groups in retail and e-commerce companies to gather insights from the recent holiday shopping season. It’s also an opportunity to assess what adjustments to tax compliance and planning may be needed well before Black Friday and Cyber Monday arrive.  

From February to March, the Index of Consumer Sentiment (which measures overall consumer confidence) declined 1.9% while the Index of Consumer Expectations (longer-term expectations of personal finances and economic conditions) dropped 4.4%. During the same period, however, consumer optimism concerning their present financial situation increased by 2.1%. These figures may shift substantially in the coming months in response to ongoing geopolitical volatility and geoeconomic uncertainty.

Returns are a Holiday Hangover

The latest findings from the ongoing Vertex Commerce Study shed fresh light on longer-term consumer behaviors and preferences. The survey research shows that post-holiday returns represent an increasingly important aspect of the customer experience:

• 47% of U.S. consumers are likely to return gifts or purchases after the holiday season
• 50% of shoppers prefer to return items in-store
• 30% prefer a combination of online and in-store returns
• 25% of consumers return items using a different channel than the channel used to complete the purchase
• 15% prefer exclusively online returns (while 6% of shoppers use third-party drop-off locations)
• 61% of shoppers consider a retailer’s return policy before deciding to shop there

The final data point is illuminating. Indirect tax teams should be aware that consumers view the returns process as an important factor in their purchasing decisions and shopping experiences. Any tax determination inaccuracies that arise during the returns process, regardless of which channels are used, can undermine the customer experience.

Omnichannel Experience is a Growth Opportunity

Indirect tax leaders should also recognize that omnichannel capabilities remain a top priority in boardrooms and C-suites in 2026.  Omnichannel experience enhancements represent the highest ranked growth opportunity, according to the 330 retail executives who participated in Deloitte’s 2026 Global Retail Industry Outlook survey. “Retailers are aligned in prioritizing faster, more flexible fulfilment options to better meet changing consumer behaviors, aiming to make omnichannel engagement more accessible and effective for their customers.”

As retail leadership teams work to address rising costs along with consumer sentiment fluctuations, the Deloitte survey indicates that they have the following actions ready to implement as needed:

1. Gradually adjusting retail prices upward
2. Changing the mix of products sold
3. Increasing thresholds for free shipping or promotions
4. Restructuring the supply chain
5. Absorbing a portion of the cost increases for price competitiveness

The message from the latest holiday season is clear: returns are now a core part of the shopping journey, not an exception to it. As retailers refine omnichannel strategies to stay competitive, tax compliance processes must keep pace. Ensuring accurate, consistent tax treatment across every return scenario helps protect the customer experience while enabling the flexibility that retail leaders continue to demand.