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Retailers rethink pricing strategies as tariffs hit nearly 900 product categories: Global-e

Tiger Lily photo
Tiger Lily photo

As Canada recently announced tariffs as high as 50% on nearly 900 categories of US goods, brands have less than two weeks to reassess pricing and product assortments from the Great White North. But raising prices across the board could be just as damaging as absorbing the costs, particularly if it makes unaffected products more expensive or sends customers elsewhere.

Global-e, the platform powering global ecommerce for more than 1,500 brands, including SKIMS, Alo Yoga, and Adidas, has direct insights into the operational challenges brands are facing across markets.

In an interview with Retail Insider, Matthew Merrilees, CEO North America at Global-e, discusses how brands can adjust their pricing strategies to protect profitability and customer conversion, and how continued US-Canada trade tensions could push more retailers to diversify internationally.

Question: With Canada’s tariffs on nearly 900 categories of U.S. goods recently taking effect, what pricing strategies should retailers consider to protect margins without driving away price-sensitive Canadian consumers? 

Answer: As a first step, retailers should identify exactly which products are affected, as the surtax is HS-code based and can apply differently even within the same category. Accurate product classification is critical to ensure the right duties are calculated and that unaffected products are not charged unnecessarily. They should then assess the impact across their product and sales mix, including which items drive the most volume, and use that analysis to determine the right pricing response. This can support a more balanced, targeted increase rather than simply passing the full additional cost onto every affected item. For retailers that are not significantly impacted by the new surtax, it may make sense to hold off on price changes until the dust settles, avoiding back-and-forth adjustments.

Retailers could also consider whether adjustments to the assortment offered in Canada could help manage the impact. Protecting profit margins is not just about pricing strategy; having a duty drawback solution in place for returned goods is also key to reducing the overall tariff burden and protecting profitability.

Q: Should retailers raise prices only on products directly affected by the tariffs, or is there a risk that more broadly increasing prices across an assortment could hurt customer conversion and brand loyalty? 

A: First, to protect conversion, retailers should present their Canadian shoppers with product prices that are inclusive of applicable duties, with only sales tax added at checkout, as they are used to when shopping domestically. This ensures shoppers are not faced with unexpected charges upon delivery, which could significantly hinder the customer experience and retention. The question is how to incorporate the duty cost into product prices in a way that balances profitability without hampering sales. To decide whether to apply a more moderate increase across a broader assortment or raise prices only on products affected by the new surtax, retailers should take into consideration their product mix, local demand and the competitive landscape.

Q: How should brands determine whether to absorb tariff-related costs, pass them on to consumers, or find a middle ground, particularly in highly competitive categories such as fashion and apparel?  

A: In the short term, retailers would need to find the right balance between protecting margins and maintaining demand, which may mean absorbing some of the additional cost while passing some on through pricing. Again, to determine that balance, retailers should analyze the impact across their products and take into consideration additional factors, including the competitive landscape — especially in categories such as fashion and apparel. Over the longer term, retailers could also review the product mix they offer in Canada and consider reducing the share of products that are more heavily impacted by the surtax, while prioritizing less-impacted or unaffected products within the same category.

Mandiri Abadi photo
Mandiri Abadi photo

Q: Could the continued trade tensions between Canada and the U.S. accelerate efforts by retailers to diversify their sourcing, suppliers and international markets, and what would that shift look like operationally?  

A: Continued trade tensions reinforce the importance of diversification across international markets. Selling direct to consumers globally can enable retailers to capitalize on new market opportunities and help offset declines in other markets. It could also lead more retailers to consider diversifying their sourcing, although sourcing decisions are increasingly complex and cannot always be made based on one market alone. Shifting production or suppliers could, for example, create additional duty exposure in the U.S., where tariffs may apply depending on the country of manufacture. Retailers therefore need to assess their full trade and fulfilment setup, not just sourcing location. More broadly, having the right global trade and operational solutions in place — including fulfillment models that can help reduce the duty burden — can give retailers more flexibility to respond to policy changes, protect margins and continue growing across markets.

Q: What are you seeing among global brands in terms of how they are adapting their e-commerce pricing and product assortments to manage cross-border costs, and what lessons should Canadian retailers take from those strategies?  

A: The brands adapting most effectively are managing pricing and proposition market by market, rather than treating international e-commerce as a single market. They are using country-level insights to understand the impact of duties, taxes and other trade-related costs, and adjusting their commercial strategies accordingly. They are also often working with specialized Merchant of Record partners that take on trade compliance liability and can support different cost-effective fulfilment models. This can help retailers remain agile and adapt quickly to changes, while protecting both sales and margins. The lesson for Canadian retailers, as well as retailers in other markets, is that with the rapid changes to import regulations — not only in the U.S. and Canada, but also in regions such as the EU — the ability to respond quickly without placing additional strain on internal resources is becoming increasingly important. At the same time, retailers should ensure they are able to offer a seamless, localized customer experience, with duties and taxes settled upfront instead of surprising the shopper at the door.

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Canadian Retail Properties Perform Well in the First Half of 2026: CBRE

Gustavo Fring photo
Gustavo Fring photo

Canadian retail properties performed well in the first half of the year, with suburban fundamentals proving particularly strong, according to CBRE’s new H1 2026 Retail Rent Survey. 

Vacancy has remained tight across key retail formats, especially grocery-anchored centres, supported by sustained population growth in select cities and consistent tenant demand, said the national real estate company.

Available retail space is at capacity in several high-growth corridors, prompting an uptick in retail development in select cities. Demand has continued to shift toward service-oriented uses, including medical, fitness, personal services, and Quick Service Restaurants (QSR). Experiential and entertainment uses are providing creative solutions to backfilling large-format vacancies, it added.

“While trade issues will have an impact on Canadian consumer sentiment, the long-term trajectory for our retail sector is strong,” said CBRE Senior Vice President Alex Edmison. “Toronto is leading the country on the return to office trend, creating new momentum there and in other downtown cores across Canada, particularly where revitalization efforts have been put in place. Supply of retail space has also remained constrained, limiting options for growth.”

Rental appreciation was noted in 28 of the total 131 format types or key urban areas captured in the CBRE survey, along with eight decreases. All format types experienced at least one rate increase across Canada, with Toronto and Winnipeg logging the highest number of increases, said CBRE.

Here are the most active and growing segments for 2026, according to CBRE:

  • Luxury & Apparel – Canada’s luxury and apparel sector is undergoing a notable shift in composition. Traditional luxury groups have pulled back on new leasing activity amid economic uncertainty and softening confidence among aspirational shoppers. Athletic and athleisure brands are capturing premium retail space in top corridors, competing for flagship locations in urban markets. Mid-tier contemporary brands are also gaining ground, occupying space previously reserved for heritage luxury names.
  • Health/Wellness – Demand across the health, wellness and medical sectors is being driven by both public and private operators expanding their footprints. Healthcare providers see the value of strategically located real estate and how it improves patient access while expanding their client bases and brand presence. Medtech firms recognize the importance of physical space for research and collaboration, and to create environments that enhance customer engagement, clinical partnerships and growth opportunities.
  • Necessity – Businesses that serve everyday needs are driving a significant share of leasing activity, including grocery, pharmacy, childcare, medical, pet care, wellness and convenience concepts. These categories benefit from recurring spending patterns that are less susceptible to short-term economic fluctuations, providing operators the confidence to expand in uncertain environments.
  • Food & Beverage – Low vacancy at high-performing retail centres is driving creative growth strategies among food and beverage operators. Converting existing restaurants is enabling operators to secure space and avoid high construction costs. QSRs continue to push through squeezed margins with menu innovation and loyalty programs. Notable activity includes recent brand acquisitions by Happy Belly and Foodtastic, alongside expansion from McDonald’s, Tim Hortons, Shake Shack, and Jersey Mike’s.
Vitaly Gariev photo
Vitaly Gariev photo

CBRE also cited some notable retail trends to watch for in markets across Canada:

  • Vancouver – Local retail fundamentals are expected to remain favourable amid a period of limited new supply following completion of Oakridge Park and Simons taking 92,000 sq. ft. at Nordstrom’s former Pacific Centre location. Stagnant population growth, muted job growth, and weakened consumer spending have tempered activity, contributing to slower leasing. But limited availability of quality inventory has insulated landlords from economic headwinds.
  • Calgary – The city’s suburban retail market is one of Canada’s strongest. The South, Southeast and North Central quadrants have exceptionally tight availability as retailers pursue rapidly growing residential trade areas. Grocery-anchored developments are leasing well in advance of completion. Demand is strongest from value-oriented grocers, food, medical, fitness, childcare and service retailers seeking access to expanding suburban populations.
  • Edmonton – As downtown Edmonton enters an exciting new chapter, fresh opportunities are emerging for businesses seeking a place in the heart of the city. National Bank Centre is nearing completion of its podium, with anticipation building for the dynamic mix of tenants expected to bring new energy to the area. The suburban retail market continues to thrive, fueled by population growth and new development across the region. Strong tenant demand is keeping vacancies moderately low.
  • Toronto – The downtown core is benefiting from strengthening return-to-office rates, which support weekday foot traffic and demand for food-and-beverage and service retail. Luxury home furnishings retailer RH is set to open at Bloor Street and Avenue Road. As vacancy tightens along Bloor St. W., attention is shifting to adjacent streets in Yorkville and Ossington. Yorkdale’s luxury wing has cemented its status as a destination for international brands, with openings including Dior, Moncler, Tom Ford, Saint Laurent and soon Gucci.
  • Montreal – Suburban nodes are benefitting from all-time low vacancy for quality space and downtown activity is driven by experiential retail. The Sainte-Catherine Street West revitalization continues to influence one of Montreal’s tightest retail corridors. Flagship relocations and sustained demand from national and international retailers outside of renovation zones are leading to constrained leasing options. 

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Ryde: Canada launches sleep shot aimed at Canadians struggling to fall asleep

Ryde: photo
Ryde: photo

Canadian functional-wellbeing company Ryde: has launched a new sleep-focused shot containing melatonin and other ingredients intended to help adults fall asleep faster on occasional nights when they have difficulty drifting off.

The 60-millilitre blackberry-flavoured Ryde: SLEEP is the latest addition to the company’s portfolio of functional wellbeing shots. The company says the product is intended to provide an option for adults seeking additional support on nights when they have trouble falling asleep.

New product targets sleep

Ryde: SLEEP contains 135 milligrams of GABA, 5 milligrams of melatonin, 50 milligrams of L-tryptophan, 1.7 milligrams of vitamin B6 and 0.98 milligrams of vitamin B2. The company describes GABA as one of the body’s natural “slow down” signals and melatonin as a hormone that helps regulate the sleep-wake cycle.

The product is vegan and contains zero sugar and zero calories, consistent with Ryde:’s other functional wellbeing shots. The company says its products are designed to provide convenient support that consumers can take with them.

“At Ryde:, we believe wellbeing should feel easier, not more complicated,” said Kervy Diaz, Country Manager (Canada), Ryde:. “Sleep is one of the foundations of wellbeing, yet many Canadians struggle to get the rest they need. Ryde: SLEEP expands our portfolio with a convenient option designed for the occasional nights when a little extra support can make a difference.”

Ryde: cited data showing that 20 per cent of Canadian adults report having trouble going to sleep or staying asleep most or all of the time as part of the rationale for introducing the product.

Nationwide retail availability

Ryde: SLEEP is now available online through Amazon and at Circle K, Couche-Tard, Parkland, Petro-Canada and 7-Eleven locations across Canada.

The launch expands Ryde:’s portfolio beyond its existing functional wellbeing products, with the company positioning the new shot around sleep as a component of overall wellbeing.

The company is also launching the Sleep for Tomorrow Project, a campaign tied to the introduction of SLEEP. The initiative asks Canadians to complete the statement, “I’m sleeping with Ryde: tonight, because tomorrow, I’m waking up for_____.”

Ryde: says it is seeking stories from Canadians focused on kindness, connection and purpose. Two participants will receive a Ryde: SLEEP prize package that includes $5,000. The contest is scheduled to launch Sept. 12 on Ryde:’s Instagram account, with terms and conditions applying.

Ryde: photo
Ryde: photo

Product carries usage warnings

Ryde: says SLEEP is intended for adults 18 and older and may not be suitable for everyone. The company advises consumers to read and follow the label and says the product should not be used by people who are pregnant or breastfeeding. Because the product contains 5 milligrams of melatonin, Ryde: warns that it may cause drowsiness or sleepiness. Consumers are advised not to take it while driving, operating heavy machinery or consuming alcohol.

The company also states that Ryde: SLEEP is not intended to treat insomnia or other sleep disorders and is not a substitute for healthy sleep practices. It is not recommended for daily use.

Ryde: describes its broader business as focused on functional wellbeing shots designed to help consumers feel their best when they need support. Its shots are vegan, contain zero sugar and zero calories, and include the company’s Ryplenish formulation.

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Winnipeg-based Activate to open first Australian location in Melbourne in early 2027

Activate photo
Activate photo

Winnipeg-based entertainment company Activate is expanding into Australia, with its first location in the country set to open at Melbourne’s Highpoint Shopping Centre in early 2027.

Activate Melbourne (Highpoint) will be located next to HOYTS Cinema in Maribyrnong, Victoria, marking the company’s entry into the Australian market and the first of several planned openings across the country.

The venue will feature 12 game rooms with more than 800 levels of challenges. Activate uses RFID technology to track players across rooms, allowing them to level up, unlock achievements and earn rewards. The games combine physical and mental challenges focused on speed, co-ordination and problem-solving. Teams of two to five people can play together.

“As we continue our global expansion, Australia feels like a natural next step,” said Adam Schmidt, co-founder and CEO of Activate. “We’re excited to bring what we’ve built in Canada to Australia and introduce a new community of Players to the games, technology and energy that make Activate unique.”

The Melbourne location will offer games including Mega Grid, Mega Laser, Strike and Hide. Players can also compete through the company’s Activate Global League and annual Tournament of Champions, which involve players and teams from its locations around the world.

Activate currently operates more than 80 locations worldwide. The company says its games, technology and facilities are designed, engineered and manufactured in Winnipeg. The Australian expansion will also involve the creation of a local workforce as Activate prepares for the Melbourne opening. The company is recruiting for a range of positions as it builds its local team.

Activate is headquartered in Winnipeg and operates locations in Canada, the U.S., Denmark, Germany, France, Finland, Malaysia, Mexico, Norway, Sweden, the U.K. and the United Arab Emirates.

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INDOCHINO launches Fall/Winter 2026 campaign focused on made-to-measure tailoring

INDOCHINO photo
INDOCHINO photo

INDOCHINO has launched its Fall/Winter 2026 campaign and collection, featuring made-to-measure suits, formalwear and outerwear designed around a range of occasions throughout the season.

Called Hold the Room, the campaign follows four friends over a weekend, using three settings — an afternoon arrival, an evening lounge and a formal dinner — to showcase the company’s tailoring and fabrics.

The Vancouver-based menswear brand, which operates showrooms across the United States and Canada as well as an e-commerce platform, said the campaign is intended to position its Fall/Winter collection as clothing that can be worn across multiple occasions rather than for a single event.

Image: Drew Green, INDOCHINO CEO

“Fall and winter are the seasons you actually spend time with people, low light, good company, long nights in,” said Drew Green, president and CEO of INDOCHINO. “That’s exactly where we wanted this collection to live, and our product team built it with that exact idea in mind. Most tailoring gets sold for one event, a wedding, an interview, a gala, and you wear it once and you’re done. We wanted to make a different case. A season isn’t a moment. It’s a run of long evenings, and the tailoring that actually matters is the stuff that holds up for hours, in more than one room.”

The company said the campaign’s three chapters are intended to show how the collection transitions through different parts of a weekend. The first chapter, Arrival, features the four friends arriving separately on a rainy afternoon wearing overcoats and tailoring. The Lounge moves into the evening, with jackets, fine knitwear and tailored pieces shown in a more casual setting. The final chapter, Formalwear, centres on a formal dinner, with dinner suits worn under candlelight.

The collection places an emphasis on fabrics, with the campaign using colour and texture to distinguish the four friends while maintaining a consistent structure. The palette includes midnight, gray, green and rust, along with warm leather, brick and low-light settings.

INDOCHINO photo
INDOCHINO photo

Among the fabrics featured is a Guabello flannel from INDOCHINO’s European collection. The fabric is woven in Biella at a mill founded in 1815. The collection also includes Italian fabrics in tonal glen check and diamond twill, as well as a soft wool check intended to transition from streetwear to evening wear.

“Our product team led with fabric first and let the styling follow,” said Green, “because a custom suit made from the right fabric for the moment speaks for itself.”

Indochino photo. The two suits available in the collection.
Indochino photo. The two suits available in the collection.

INDOCHINO said the campaign features four friends collectively rather than focusing on a single model, reflecting its approach to presenting the collection across a variety of settings and occasions.

The company, founded in 2007, said the Hold the Room collection is now available at its showrooms across the United States and Canada and through its website. INDOCHINO describes itself as a global made-to-measure apparel company operating through its showroom network and e-commerce platform. Its products include custom suits and accessories made to individual measurements.

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Daily Synopsis: Sep 10, 2026

Welcome to the Daily Synopsis by Retail Insider. We hope you enjoy the 14 articles we published today covering key developments in Canadian retail.

Mercedes-Benz has relaunched its Holt Renfrew Studio in Toronto with a refreshed concept featuring the Canadian debut of the 2027 S-Class and a new residency by luxury fashion brand Paul &, Shark. Nearly 40% of Canadian shoppers used AI tools for product discovery, price comparison, and deal hunting in the past year, signaling AI’s growing influence in the shopping journey. Pamela Shainhouse emphasizes that retail accessibility extends beyond legal compliance to becoming a core customer experience factor that influences sales and loyalty.

Canada’,s retail vacancy rate is projected to stay elevated near 2.5% as the market continues absorbing the fallout from Hudson’s Bay store closures, which sharply increased mall vacancies in 2025. Harry Rosen is closing its iconic five-level flagship at 82 Bloor Street West on September 12 after nearly 40 years, relocating to a smaller, modern three-level store just 200 metres away at 153 Cumberland Street.

🗞️ The Day’s Retail Insider Article List

🌐 Canadian Retail News From Around the Web will be back on Monday. Have an excellent weekend.

Premiumization of the Luxury Baby Gear Market

The global juvenile products market is experiencing a significant shift as modern parents increasingly prioritize design, aesthetics, and premium materials. Historically, baby utility items were marketed solely on functional utility, safety, and price. However, a new generation of consumers is redefining these categories, demanding products that align with their personal fashion sensibilities and lifestyle choices. This article analyzes how high-end design is transforming the baby retail landscape, shifting traditional utility products into coveted lifestyle accessories.

Shifting demographics and aesthetic parenting

Today’s parents, particularly millennials and Gen Z, are delaying childbirth and entering parenthood with established aesthetic preferences and higher disposable incomes. These consumers view nursery items and baby gear as extensions of their personal style. Retailers that once focused on primary colours and plastic components are now competing with brands that offer neutral palettes, organic textiles, and sophisticated patterns. This trend has created a lucrative luxury niche where parents are willing to pay premium prices for items that integrate into their home décor and wardrobe.

The demand is especially visible in wearable baby gear. Parents now seek out a premium baby carrier that functions as much like a high-fashion accessory as an ergonomic carrying device. By integrating materials like organic linen, cashmere, and jacquard-woven silk, manufacturers have successfully elevated these functional items into style statements. This aesthetic evolution has caught the attention of department stores and boutique retailers worldwide, which are expanding their floor space for luxury juvenile goods to capture higher margins.

Retail strategies driving high-end growth

To succeed in this evolving landscape, brands are adopting strategic retail frameworks borrowed directly from luxury fashion houses. Direct-to-consumer (DTC) digital storefronts have proved highly effective, allowing brands to maintain strict control over pricing, visual presentation, and the overall brand narrative. This approach bypasses traditional retail markdown cycles, preserving brand equity and exclusivity. By controlling the distribution channel, luxury parenting brands gather first-party data that allows them to react rapidly to consumer preferences and design trends.

Visual merchandising and premium packaging

In the premium segment, the purchase experience is just as important as the physical item. High-end brands invest heavily in elegant, sustainable packaging that enhances the unboxing experience, turning a simple retail transaction into a memorable event. On the physical retail floor, this translates to minimalist displays, high-quality lighting, and tactile product presentations that invite parents to feel the texture of premium textiles before committing to a purchase.

Furthermore, product diversification within these premium lines allows retailers to capture multiple customer segments. For instance, offering a versatile front facing carrier alongside traditional wraps appeals to active, modern parents who value multiple carrying options. Retailers are also utilizing drop models, limited-edition releases, and designer collaborations to create consumer urgency and cultivate a dedicated collector culture among affluent parents.

For brands looking to capture market share in this high-end segment, certain operational and marketing factors are essential:

  • Material transparency: Utilizing certified organic, sustainable, and high-grade textiles to justify premium pricing.
  • Community-focused marketing: Cultivating brand advocacy through highly visual social media platforms and parent communities.
  • Unified brand identity: Ensuring that product design, packaging, and digital storefronts maintain a consistent, luxury aesthetic.
  • Ergonomic certifications: Partnering with recognized international health institutes to validate product safety without sacrificing design.

Economic outlook for luxury brands

Despite economic fluctuations, the luxury baby gear segment remains remarkably resilient. Parents are consistently showing a willingness to economize on other household categories before compromising on the quality and comfort of products for their children. This consumer behaviour suggests that premiumization is not a temporary trend, but a permanent structural shift in consumer expectations. Retailers that adapt to this demand by blending functional excellence with high-fashion design are well-positioned for sustained growth in the coming years.

How Retailers Hire Abroad Without Opening an Entity

Retail has always been a cross-border business, but the staffing behind it is changing. As chains open in new markets, run buying offices near their suppliers, and build e-commerce and customer teams wherever the talent sits, they keep hitting the same wall: to employ someone in a country, you normally need a legal entity there, and setting one up is slow, costly, and hard to unwind if the market does not perform. Canadian retail is a live example of the pressure, with expansion and staffing pulling in different directions. More retailers are solving it the same way tech firms did: by employing people through an employer of record rather than building an entity for every market.

What an employer of record really does

An employer of record, or EOR, is a company already established in the target country that becomes the legal employer of your staff there. It runs local payroll, withholds the right taxes, makes statutory contributions, and issues compliant contracts, while your business directs the actual work. For a retailer testing a market with a handful of people, a buyer, a country manager, a small e-commerce team, it removes the biggest barrier to entry: you can employ someone legally in weeks, without incorporating.

The cost is mostly local, not the fee

The provider’s monthly fee is the part everyone looks at, and it is rarely the expensive part. The real cost is local employer obligations, and they swing hard by country. Hiring through an employer of record in Canada means covering CPP, Employment Insurance, and provincial rules that differ between Ontario, Quebec, and British Columbia. In Portugal, employer social security runs at 23.75 percent and staff are paid across 14 monthly instalments a year rather than 12. The lesson for any retailer budgeting an overseas hire is the same: the salary is the smallest line, and the statutory add-ons are what make or break the business case.

Some markets are almost impossible to enter any other way

For the largest consumer markets, the EOR route is not just convenient, it is often the only realistic way in for a first hire. Setting up to employ staff directly in China involves registering a local entity, navigating the mandatory social insurance system known as the five insurances and one fund, and meeting rules that vary city by city, the kind of local complexity the World Bank’s China country profile lays out in detail. A retailer that wants one merchandiser or a small marketing team in the market cannot justify that, so it employs through a provider that already carries the entity and the compliance. The same logic applies wherever the regulatory bar is high and the initial headcount is low.

What retailers should check before they sign

Not all providers are equal, and the differences matter more in retail than in most sectors, because retail hiring is seasonal, multi-site, and fast-moving. Before committing, a retailer should confirm whether the provider owns a local entity or leans on an in-country partner, how it handles seasonal ramp-ups and terminations, what the fully-loaded cost is once statutory contributions are added, and whether it can cover every market on the expansion map from one contract. The cheapest headline fee is often the most expensive arrangement once the local reality is priced in.

Retail expansion has always run ahead of the back office. The chains that scale abroad without nasty surprises are the ones that treat employment as a first-order question, not paperwork to sort out later, a discipline that matters even more as retail labour markets stay uneven and hard to read. Getting people on board compliantly, in the right markets, at a cost they modelled in advance, is what turns a promising store opening into a sustainable one. For a wider view of how the global labour market is shifting through 2030, the World Economic Forum’s latest workforce research is a useful backdrop.

Why Some Retail Businesses Are Classified as High Risk by Payment Processors

Acquiring banks answer one question when they classify a retailer. How much money will they be asked to refund on that retailer’s behalf, and will the retailer still be solvent when the bill arrives? A shop paying its taxes and holding every license the state asks for can be priced as high risk on that answer alone, which is why owners read the label as an accusation when it lands.

That single question explains why a bookstore and a furniture showroom with identical revenue land in different tiers. Retail generates disputes at a rate no other category matches, and the parts of retail that generate the most of them get priced accordingly.

Delivery Lag and Prepaid Goods

The gap between payment and delivery is the second input. A grocery store closes that gap in seconds. A custom cabinetry business collects a deposit in March and delivers in August, holding five months of undelivered obligation on the books at any moment.

Card networks let cardholders dispute a purchase for months after the transaction date, and the clock in many cases starts at expected delivery rather than at payment. A retailer with long lead times therefore has a dispute window that stays open long after the money reached its bank account. Preorders and made-to-order goods both extend that window. Retailers who take deposits on furniture, custom apparel, or installed equipment often find their account reviewed after a single supplier delay, because a batch of late deliveries produces a cluster of disputes that lands in one billing cycle.

Average Ticket Size and Fraud Exposure

A $40 average ticket and a $4,000 average ticket produce very different exposure for the same monthly volume. Electronics, jewelry, and luxury goods draw stolen-card fraud because the merchandise resells easily and quickly. A single disputed $6,000 watch order wipes out the margin on a month of smaller sales, and an acquirer holding a 5% reserve against that account knows the reserve would not cover three of them in the same week.

The card-not-present share of the business matters as much as the ticket size. A jeweler with a storefront and chip terminals keeps liability with the issuer on most in-person sales. The same jeweler selling online owns the fraud loss on every disputed transaction. Underwriters ask for the split between the two channels on every application, and a retailer who cannot state the percentage tends to be assumed at the worse end of it.

Regulated and Restricted Merchandise

Retailers selling products whose legal standing varies by state face the sharpest classification. Hemp-derived products, vape hardware, kratom, firearms accessories, and adult products all fall into categories where a change in federal guidance can strand a merchant mid-year.

The kratom market shows how fast this moves. Federal regulators pushed in 2025 to restrict concentrated 7-hydroxymitragynine, the kratom-derived opioid sold in gas stations and smoke shops, and several states already ban the plant outright. A retailer stocking those products can hold a valid business license in one state and be selling a banned substance across a border.

Card networks also enforce their own brand rules, which reach further than any statute. A product can be legal in all 50 states and still fall outside what a network will allow its marks to be used for. Retailers in these categories usually reach payment processing for high risk after a mainstream processor closes their account with 30 days notice, and the second account is built with the regulatory volatility priced in from the start.

Return Volume in Underwriting

American shoppers return merchandise worth close to $850 billion a year, roughly 15.8% of everything sold. Around 9% of those returns are fraudulent, which puts about $76.5 billion of annual retail volume into a category the acquirer cannot recover through normal channels.

Underwriters read return rate as a proxy for dispute rate. Apparel is near the top because sizing drives repeat returns. Furniture, appliances, and anything shipped freight rank high for a different reason, since damaged-in-transit claims often arrive as chargebacks instead of return requests. A category where returns are rising faster than sales gets flagged before any individual merchant does anything wrong.

Store Policy and Dispute Prevention

Return policy design feeds directly into dispute volume. Some chains now make it harder for online customers to send merchandise back, using shortened windows and restocking fees, with store credit in place of cash refunds. Nearly half of retailers introduced a return fee for the first time within a single 12-month stretch.

Those policies cut reverse logistics costs and push some customers straight to their card issuer. A shopper refused a refund at the counter files a chargeback instead, and the acquirer sees the ratio climb even though the retailer was following its own posted terms. Acquirers know this pattern well, which is why a restrictive return policy invites more underwriting questions.

Seasonality and Volume Spikes

A retailer doing $30,000 a month for eleven months and $400,000 in December presents a problem no monthly average captures. Approval is typically written against a monthly volume cap, and processing above the cap triggers a review, a hold, or an account freeze during the busiest weeks of the year.

Acquirers price seasonal businesses with the January dispute wave in mind. Holiday gifts get disputed in the new year, often by cardholders who received the item as a present and never saw the receipt. A December volume spike therefore forecasts a Q1 chargeback spike, and the reserve terms are written to cover it. Merchants who warn their acquirer in October, with last year’s numbers attached, usually get the cap raised for the season. Merchants who process through the cap without notice usually get frozen at the worst possible moment.

The Cost of Ignoring the Classification

A retailer who treats the label as an insult loses the ability to plan around it. The classification determines the reserve percentage that will hold back working capital during the season when inventory needs buying, the monthly cap that decides how a strong December ends, and the dispute ratio that decides the account’s survival at the next network review. Those are operating constraints with dates and dollar figures attached. A retailer who knows their return rate, their card-not-present split, and their peak-month multiple can negotiate each of them before signing. One who does not will meet them for the first time on the day the funds stop arriving.

How to Manage Peak Season Risks: Safeguard Profits and Customer Loyalty When Shipping Volumes Surge

Peak season can bring a surge in orders and shipping volumes, creating greater exposure to lost or damaged shipments and other delivery-related challenges. For businesses, those problems can affect margins, operations and the customer experience at one of the most important times of the year.

Join Retail Insider Founder and Publisher Craig Patterson and Vishav Ranjan of UPS Capital Canada Insurance Brokers for a practical 45-minute webinar examining how businesses can prepare for peak-season shipping risks. The discussion will also explore InsureShield® shipping insurance from UPS Capital, including how insurance can fit into a broader strategy for protecting shipments, profits and customer relationships.

What You’ll Learn

During Peak Season Risk Management: How to Safeguard Profits and Customer Loyalty When Shipping Volumes Surge, attendees will learn about:

  • Peak-season shipping risks: Understand some of the challenges that become particularly important as shipping volumes increase.
  • Protecting against loss and damage: Learn how businesses can think about managing the financial risks associated with shipments that are lost or damaged.
  • Customer loyalty and shipping: Explore how shipping problems can affect the customer experience and what businesses can do to prepare.
  • Insurance and InsureShield® shipping insurance: Learn about the role shipping insurance can play in managing risk and hear how InsureShield from UPS Capital can support businesses looking to protect their shipments.
  • Preparing before the holiday rush: Get practical insights that can help businesses review their shipping risk strategy before peak season is fully underway.

Attendees will also have an opportunity to submit questions in advance and participate in a live Q&A during the webinar.

Date: Wednesday, October 7, 2026
Time: 11:00 a.m. ET
Duration: 45 minutes
Format: Live webinar via Zoom

Shipping insurance coverage is only available in Ontario.

UPS Capital Canada Insurance Brokers, Limited (UPS Capital Insurance Brokers) is licensed as an insurance broker in Ontario only and is not yet offering any services or products in other provinces, including Québec. The complete insurance disclosure may be found here: Product Disclosure

If you would like UPS Capital Insurance Brokers to let you know when they are licensed in your province, then send them an email via insureshieldca@ups.com, and they will get back to you.

Insurance coverage is underwritten by a Canadian licensed insurance company and issued through UPS Capital Canada Insurance Brokers – an indirect wholly-owned subsidiary of UPS Capital Corporation (“UPS Capital”). The insurance company and UPS Capital Insurance Brokers reserve the right to change or cancel the program at any time.

Insurance coverage is governed by the terms and conditions, including the limitations and exclusions, set forth in the applicable insurance policy (the “Policy”). This information does not in any way alter or amend the terms or conditions, including the limitations or exclusions, of the Policy, and is intended only as a brief summary. Insurance coverage is not available in all jurisdictions. UPS Capital Insurance Brokers only issues policies of a single insurer in Canada, and receives commission on sales of insurance. An affiliate of UPS Capital Insurance Brokers reinsures a material portion of the risk insured by this insurance policy and the UPS Capital group therefore has a financial interest in the insurance program. You are not required to purchase insurance from UPS Capital Insurance Brokers and have the right to seek insurance elsewhere. In particular, your ability to ship using United Parcel Service Canada Corporation or its affiliates is not conditional on your purchase of insurance from UPS Capital Insurance Brokers.