After a strong holiday shopping season, many consumers are now hitting the stores again — this time to return their purchases.

Altogether, consumers spent $257.8 billion online between Nov. 1 and Dec. 31, jumping 6.8% year over year to a fresh record for e-commerce, according to a new report from Adobe Analytics.

However, returns then spiked 4.7% compared to last year in the days immediately following Christmas Day, from Dec. 26 to Dec. 31. Returns are expected to increase in the first few weeks of January, as well, Adobe found.

“It’s a pretty predictable uptick post-Christmas,” said Vivek Pandya, lead analyst at Adobe Digital Insights. “That’s a part of the overall experience.”

In 2025, returns were expected to amount to 16% of all merchandise sales, totaling $849.9 billion in returned goods, according to an October report by the National Retail Federation.

With the explosion of online shopping since the pandemic, the online return rate is even higher, amounting to as much as 19%, the NRF found.

For consumers, returning has become a key component of the shopping experience. In fact, a growing share of shoppers buy products they never intend to keep.

Nicole Pearl, 47, says she often orders clothing in multiple sizes for her children — ages 14, 12 and 8 — to hedge her bets on the best fit, particularly when apparel is heavily discounted. “The Black Friday holiday season is definitely where I do more shopping than normal and more returning than normal,” said Pearl, who lives in Chicago.

According to a 2024 report by Optoro, 56% of consumers purchase goods in multiple sizes or colors, some of which they then send back, a practice known as “bracketing.”

Other shoppers go a step further: 69% admit to “wardrobing,” or buying an item for a specific event and returning it afterward, according to Optoro.

Almost half of shoppers said it’s acceptable to “bend the rules” when returning items, the NRF also found.

Holiday shopping has always felt like a “chore” for Amrita Bhasin. 

Between deciding what to buy, comparing prices and checking reviews, the 24-year-old retail tech CEO said she spent more than 15 hours each year buying gifts for her friends and family, a process that took the joy out of giving. 

But this year, Bhasin said she did all of her shopping in a fraction of the time and even had a little “fun” — all thanks to her new personal assistant: ChatGPT. 

“I feel like I’ve got that physical store associate that I’m talking to, so I feel like I’m getting better recommendations. I actually think my tendency to buy is higher because of ChatGPT,” Bhasin, based in Menlo Park, California, told CNBC. “It has really changed the game.” 

Bhasin is one of the many shoppers turning to AI platforms like OpenAI’s ChatGPT, Google‘s Gemini and Perplexity this holiday season to help them buy gifts for their loved ones, and maybe a few for themselves, too. Whether consumers use them to get gift ideas or compare prices, AI platforms are poised to reshape the shopping experience and drive billions in revenue this holiday season as it becomes harder to get discovered on traditional search platforms.

In a report published last month, Salesforce said it expects AI to drive a staggering $263 billion in global online holiday sales this year, representing 21% of all holiday orders. 

Though estimates vary widely, surveys conducted by Visa, Zeta Global and other organizations found that between 40% and 83% of consumers plan to use AI for shopping this holiday season. Meanwhile, AI traffic to U.S. retail sites surged 760% between Nov. 1 and Dec. 1, according to Adobe. 

While AI shopping is in its early stages, initial reads on how shoppers are interacting with it show the opportunity it can bring for retailers. Shoppers arriving on retail websites from generative AI platforms are 30% more likely to buy something and about 14% more engaged than those coming from non-AI sources, meaning they’re spending more time on the site and are less likely to leave immediately, Adobe found. 

These AI-fueled shopping visits now generate 8% more revenue per session, the firm found. AI tools can also help shoppers spot deals and aid lesser-known brands in getting discovered — about half of the gifts Bhasin bought this year came from brands she’d never shopped before.

“It’s where consumers are going, because they’re just asking questions around, like, ‘Hey, where can I find the best gift under $20 for my niece that cares about these things?'” said Kimberly Shenk, the founder and CEO of Novi, a tech firm that helps brands adjust to AI shopping.

The surge in AI shopping has led retailers big and small to rethink their strategies to ensure they’re showing up where customers expect them to be. Walmart and Amazon have each launched their own AI shopping assistants, and others, including Walmart, Target and Etsy, have partnered with OpenAI so customers can search for items or buy products…

Anyone who has ever gone in search of a product review on Amazon knows how valuable the experience of other shoppers can be, and how easy it is to fall down the rabbit hole of customer comments, from five-star raves to one-star takedowns — sometimes hundreds of words to get to the point. As Amazon continues to roll out AI features it says will make shopping easier, AI-generated audio descriptions of products are in the mix and scraping that customer commentary — maybe ultimately settling into a position to replace it as a go-to source of buying information. 

Called “Hear the Highlights,” the AI-voiced product descriptions rely on a large language model to script the summary based on a variety of sources, pulling from Amazon’s product catalog, customer reviews, and information from across the web, and then translating the content into short-form audio clips. The summaries began rolling out during the summer on select products to a subset of U.S. customers and have now reached all U.S. customers as a button in the mobile shopping app, scaling up to cover over one million products.

A unique appeal of Amazon, and other e-commerce options, has always been the ability to get information from actual users, not just product descriptions. Of course, bogus reviews have long been a problem for Amazon, even though it bans use of paid promotion and other inauthentic forms of review writing. You still have to sort through various efforts to game the system, and in recent years, signs that the newest review writers are chatbots like ChatGPT. But actual people sharing their actual, idiosyncratic experience with a product — customers as a source of information, and informed decision making — have been a key part of the learning process from clothing and shoe sizes to safety and more narrow questions: When purchasing a new toaster, does it do bagels, is the timer setting accurate, how easy is it to clean the crumb tray?

Can AI improve on that? Reviews are by nature unwieldy in the mass individuality, but human readers have proven pretty adept at distilling what they need from the human chaos. In some sense, the brain of the average Amazon review reader is a pretty good large language model, skimming and picking out key words and key information, so an AI will have to do it at least as well as a human would if it’s to add to the customer experience as promised. 

AI and cognitive overload

AI does have its advantages. For one, it won’t experience cognitive overload when facing an electric tea kettle on Amazon with over 32,000 reviews. It can comb through the data, but can it gives us only what we need or want to know? That can still be tricky for AI to get right, and it may be inherently problematic to mix product catalogs, customer reviews, and web information into a single distillation – with…

Returns on Amazon are free and easy for shoppers, but they’re risky and expensive for the small businesses that sell a majority of the goods on the world’s biggest e-commerce site. Returns have driven some sellers to exit the popular Fulfillment by Amazon program, while others told CNBC they’d like to leave the platform altogether.

At the heart of the problem is a big rise in returns fraud, which has led to customers mistakenly receiving used products when they ordered something new. In two particularly egregious examples involving baby products described to CNBC, Amazon sent customers used diapers and a chiller with someone else’s rotten breastmilk inside.

“I really don’t think that consumers understand how many small businesses are on Amazon and how their return habits affect small businesses and families like mine,” said Rachelle Baron, owner of Beau and Belle Littles, which sells reusable swim diapers on Amazon.

Baron said her business tanked after a return incident with Amazon. The e-commerce platform shipped soiled swim diapers to customers after the used baby products had been returned to Amazon, Baron said.

“There was actually two diapers that were sent out that were poopy,” she said.

In 2024, nearly 14% of all U.S. retail returns were fraudulent, up from 5% in 2018, according to a report by the National Retail Federation. In total, the report found that returns cost retailers $890 billion in 2024.

Amazon started charging sellers in its fulfillment program (FBA) a new fee in June 2024 for items that exceed certain return rate thresholds. Sellers who sign up for FBA rely on Amazon for logistics, including shipping, packing and returns.

In September, a couple months after the fee went into effect, e-commerce group Helium 10 saw return rates for U.S. Amazon sellers drop nearly 5%.

“It’s forcing the seller to have higher quality listings and higher quality products,” said Helium 10 General Manager Zoe Lu.

Amazon has also started adding a warning label to some “frequently returned items,” which could be contributing to the dip.

However, the new fee may also be leading to rising prices.

One survey by e-commerce analysis company SmartScout found that 65% of sellers said they raised prices in 2024 directly because of Amazon fee changes. Other sellers told CNBC returns fraud is the reason they’ve raised prices.

In total, CNBC talked to seven Amazon sellers to find out how they’re handling the rising cost of returns.

“We’re running at about just over 1% net profit on Amazon, totally due to fraud and return abuse,” said Lorie Corlett, who sells Sterling Spectrum protective cases for hot wheels. She said her return rate is 4% on Amazon and only 1% on other marketplaces like Walmart. “It’s really Amazon that’s accountable at the end of the day. People would stop doing it if Amazon held them accountable.”

Amazon told CNBC it has no tolerance for fraudulent returns and that it takes action against some scammers. Those measures include denying refunds…