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Why wealthy shoppers generate more retail refunds

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12 months ago

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Piyaphorn Promnonsri | E+ | Getty Images

Shoppers with higher incomes are more likely to return retail purchases they make, a new report finds. 

Higher-income households had the highest percentage of retail refunds, at 5.3% of their purchases in 2025, according to a recent report by the Bank of America Institute that compared higher-, middle- and lower-income shopper return behavior. The analysis is based on aggregated, anonymous transaction data from bank debit and credit card holders who made at least five transactions per month.

Lower-income households had the smallest percentage of retail refunds at around 3.7% of their purchases.

Higher-income shoppers are less cash-strapped than lower earners, the report notes, so they are more likely to “buy items speculatively,” especially if they know they can “return it later if they decide it’s not right for them.” 

This behavior is similar to what shopping experts call “bracketing,” or the act of ordering multiple products in different sizes, colors or variations, with the intention of keeping a few and returning the rest.

“That’s likely to be somewhat easier for someone who has a higher income to do,” said David Tinsley, lead author of the report and senior economist at the Bank of America Institute.

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To be sure, bracketing is not really new, said Edgar Dworsky, a consumer advocate and founder of ConsumerWorld.org.

“It’s really been around as long as the internet has been around,” Dworsky said. “Unlike walking into a department store — going into Macy’s and trying on something there, or seeing things in person — you’re buying much more blindly online.”

More shoppers are making more frequent returns. Nearly half, or 46%, of consumers return purchased items multiple times a month, according to a separate 2024 report by Optoro, a returns solutions company. That’s a jump from 29% in 2023.

While consumers value the ability to return products, retailers have been tightening their return policies in recent years to mitigate the high costs, experts say. 

Why return policies are tightening

Broadly, the ability to return unwanted purchases is important for consumers.

About 76% of surveyed respondents consider free returns important when deciding where to shop, per a 2024 report by the National Retail Federation and Happy Returns, a returns shipping company.

Nearly as many, 67%, of respondents stated that a negative return experience would deter them from shopping with a retailer again. 

The survey polled more than 2,000 consumers who had returned at least one online purchase in 2024, and 249 e-commerce and finance professionals from retailers with at least $500 million in revenue.

Despite those desires, returns can be costly for retailers. In 2024, retailers expected that about 16.9% of their annual sales would be returned, reaching an average cost of $890 billion, according to the report.

“Retailers themselves say it’s a very expensive business,” said Tinsley.

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To offset the costs, companies have been tightening their return policies in recent years. NRF and Happy Returns found that about 66% of retailers began charging for one or more return methods.

Another way to cut back on costs is by shortening the window consumers have to make returns, said Dworsky: “We’ve generally seen this over the years.”

“I think back to the old days when you bought something … and you had maybe 180 days or maybe no return limit,” he said.

As tariffs, or taxes on imported goods, increase the cost of products, companies may look for ways to tighten return policies even further to cut down on expenses, said Dworsky.

“One of the ways of cutting expenses is to cut back on the length of return periods,” he said.

What to consider before you go shopping

To avoid going through the hassle of returning a product, Dworksy said it’s important to understand what you’re buying ahead of time.

One way to do so is by checking online reviews from customers who recently purchased the item. Some retailers, like Amazon, will flag whether shoppers tend to keep or return certain products, which can help you gauge the quality of the piece.

Check a retailer’s return policies before you buy, especially if you think there’s a chance you won’t keep the item. Look for businesses that offer more flexible terms, he said.

A 2024 report by GoDaddy found that 77% of shoppers check the return policy before making a purchase. The site polled 1,500 consumers in September.

For additional protections, it can be helpful to use a credit card for the transaction, said Dworsky.

Credit cards can offer several kinds of return protections that help cardholders in different ways, such as extending the time a consumer has to return an item or the ability to dispute charges and get a refund, per Bankrate.

However, make sure to review the fine print in your card and what terms may apply.

“Credit card return protection is a notoriously fickle credit card perk that’s increasingly rare,” notes the Bankrate report.

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Personal Finance

$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

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6 days ago

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August 8, 2026

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The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

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Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

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1 week ago

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August 7, 2026

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Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

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Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

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2 weeks ago

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August 1, 2026

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As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

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