The international returns cost of Black Friday is the line item most peak budgets simply leave out. Teams plan inventory, carrier surcharges, ad spend, and support staffing. Then January arrives, and a wave of returns lands on a budget that already closed.
Retailers expected 17 percent of holiday sales to come back in 2025, according to the National Retail Federation and Happy Returns. Online, the number runs higher, with 19.3 percent of ecommerce sales expected to be returned. For a brand selling across borders, each of those returns costs more than a domestic one, and it costs you twice.
This guide explains why the cost appears twice, how to estimate it before peak, and which return model keeps a cross border return from wiping out the margin on the original sale.
Why the cost of an international return appears twice
The cost appears twice in two different ways, and both matter for the budget.
First, it appears twice in the operation. By the time a customer asks to return an item, you have already paid for outbound shipping, any peak surcharge, duties if you shipped delivered duty paid, and the acquisition cost of that sale. The return then adds a second round of costs on top: a reverse label, a second border crossing, inspection, and the refund itself. Most of the first round never comes back.
Second, it appears twice on the calendar. The sale lands in November, inside the peak budget. The return lands between late December and February, when gifts get opened and exchanged. By then, the peak budget has closed, the team has moved on, and the returns cost hits a quarter that never planned for it.
That timing is why so few teams budget it. The cost is predictable. It simply arrives after everyone stops looking.
The first appearance, what you already spent on the sale
Before any return happens, the order already consumed real money. Outbound international shipping is the largest piece. During peak, that shipping often carries demand surcharges on top of the base rate.
Duties add another layer. When you ship delivered duty paid, you pay import duties and taxes upfront so the customer sees one clean price. If that customer returns the item, recovering those duties is rarely simple, and in many cases the brand never recovers them at all.
Then there is the acquisition cost. Black Friday traffic is expensive. Every returned order represents ad spend that produced revenue for a few weeks and then gave it back. As we detailed in our guide to calculating the real cost of an international order, expected return cost belongs inside the per order cost model from the start, not after the fact.
The second appearance, what the return itself costs
The return adds its own costs, and cross border returns carry more of them than domestic ones.
The reverse label comes first. Shipping an item back across a border costs far more than a local return. Next comes the second border crossing. Bringing goods back into the United States creates a new customs event, with its own documentation and potential charges.
After that, someone has to receive, inspect, and decide what to do with the item. Finally, there is time. Cross border orders return at roughly 2.4 times the domestic rate once refund cycle delays are factored in, and international refunds typically take two to three times longer to process than local ones. During that delay, the item sits outside sellable inventory, and the customer waits.
That wait carries its own cost. One in three shoppers tends to blame the brand, not the carrier, when something goes wrong after purchase. A slow international refund damages repeat purchase far more than the return itself.
Why the peak makes returns worse
Holiday returns behave differently from returns in any other season. Volume spikes, gift purchases come back from people who never chose the product, and return windows often stretch. In 2025, 37 percent of retailers planned to extend return windows for the holidays, and 43 percent planned to hire seasonal staff just to handle returns.
Categories matter too. Apparel return rates run between 20 and 40 percent, with fit and sizing driving more than half of those returns. A fashion brand selling heavily on Black Friday should expect its January returns wave to be much larger than its average month.
Meanwhile, merchants are pushing back. According to NRF data reported in January 2026, 72 percent of merchants started charging return or restocking fees, or limited return options, in the past year. That trend shows how much returns now weigh on margin.
How to budget the international returns cost before peak
Budgeting returns does not require perfect forecasting. It requires a simple model applied by category.
Start with the expected return rate for each product category, based on your own history or on category benchmarks. Multiply that rate by the number of international orders you expect during peak. That gives you the expected return volume.
Next, estimate the net cost per return. Add the reverse shipping cost, the processing and inspection cost, and any duties you will not recover. Then subtract the value you expect to recover by reselling the item.
Multiply the expected return volume by the net cost per return. That total is your peak returns budget. Place it in the peak plan, not in January, so the true margin of Black Friday is visible before you commit to promotions.
An illustrative example
Consider a hypothetical scenario. A US apparel brand expects 4,000 international orders during Black Friday week, mostly into Canada, Mexico, and Latin America. Using a 25 percent apparel return rate, it should plan for about 1,000 returns in January.
If those returns come back through scattered carrier labels, each one arrives on a different day, with different paperwork, and no one inspects it quickly. Items sit in a corner of the warehouse for weeks. Meanwhile, the customer waits for a refund, and the item misses the rest of the selling season.
Now compare a model where every international return flows into one managed hub, with a prepaid label, a tracked route, and a defined inspection step. The item gets graded, reconditioned when possible, and returned to sellable inventory fast. In this scenario, the return process alone decides how much of the January wave turns back into revenue.
The four return models, and when each one fits
Brands have four practical options for handling international returns.
The first is returning to origin without a defined process. This is the default for many brands, and it is usually the most expensive, because returns arrive scattered, slow, and without a clear inspection step.
The second is a managed return hub. Returns follow one tracked route into a facility where items are inspected and prepared for resale. This shortens refund time and gets inventory back on sale faster.
The third is local resale or liquidation. Items that cannot return to prime inventory can be resold, discounted, or liquidated in the destination market, instead of paying to bring them home.
The fourth is a refund without return. For low value items, the cost of any return trip can exceed the item’s value. Selected SKUs may justify a refund without requiring the item back.
Most brands use a mix, with rules by product category and return reason.
How Ship Returns handles international returns into the US
Ship Returns is ShipSmart’s international reverse logistics solution, operated through a hub in the United States. It gives international buyers a prepaid return label to the ShipSmart US hub, where items are received, inspected, reconditioned, and made available for resale.
For a US brand selling abroad, that means international returns stop arriving as a scattered mix of carrier labels and customs paperwork. Instead, every return follows one tracked route into one hub, with one inspection standard.
Ship Returns generates return labels automatically and schedules pickups with carrier coordination. It tracks each return end to end, so the customer and your support team see the same status. You can also configure rules by return reason and product category, which lets you treat a sizing return differently from a defective item.
The solution integrates with ecommerce platforms, ERPs, and marketplaces. A dashboard shows status, lead times, and reverse operation KPIs, so returns stop being a January surprise and become a managed line in the operation.
What to set up before Black Friday
Define your return policy by market and category before peak, not after the first returns arrive. Decide which categories come back to the managed hub, which qualify for local resale, and which justify a refund without return.
Next, communicate the policy clearly at checkout and on the order confirmation. A shopper who understands the return process before buying generates fewer support tickets later. Then set your holiday return window deliberately, knowing that a longer window pushes more returns into February. As we covered in our breakdown of why Black Friday is your operation’s biggest stress test, support faces the delivery questions and the returns wave at the same time.
Finally, put the returns budget inside the peak plan. That single step shows the real margin of Black Friday before you lock in discounts, instead of revealing it in a January report.
Frequently asked questions about international returns cost
Why is the international returns cost higher than domestic?
A cross border return adds a second border crossing, longer transit, and often duties that are hard to recover. It also keeps the item out of sellable inventory longer, and refunds take two to three times longer than local ones.
How much of Black Friday sales should I expect to be returned?
Retailers expected 17 percent of holiday sales to be returned in 2025, and 19.3 percent of online sales overall. Apparel can run much higher, between 20 and 40 percent, depending on category.
When do Black Friday returns actually arrive?
Most holiday returns land between late December and February, after gifts are opened. That is why the cost often hits a quarter that never budgeted for it.
How can I reduce the cost of international returns?
Set return rules by category and reason before peak, communicate the policy at checkout, and route returns through one managed process with a clear inspection step. For low value items, a refund without return can cost less than any return trip.
The international returns cost of Black Friday is predictable, and it belongs in the peak budget. ShipSmart helps brands bring international returns into a managed US hub, so a return becomes resellable inventory instead of a second loss. Book a Black Friday readiness call and set up your returns plan before the January wave arrives.
