For retailers, returns are a necessarily evil that comes at the end of each holiday shopping season, but it appears even more holiday purchases are being returned this time around.

That’s because American consumers did more of their holiday shopping online in 2016, and online purchases are returned in greater numbers, compared to traditional in-store purchases. eMarketer projected online stores rang in a record $94 billion in sales this holiday season, up 17 percent from last year.

The company – and its competitors – are now facing a wave of returns, as customers re-box their items and ship them back. A new report from the commercial real estate firm CBRE found that about 8 percent of items purchased in brick-and-mortar stores are typically returned or exchanged, but online purchases are returned twice or three times more often.

Jan. 5 was the busiest day for returns, so much so that it has become known as National Returns Day.  UPS estimates it handled 1.3 million return packages on Thursday, up from 1 million last year.

CBRE calculates that the total value of returned goods bought online this holiday season (through online retailers) and could be as high as $29 billion.

“It’s a big hit to the bottom line,” said Kurt Strasmann, a senior managing director at CBRE. “As total e-commerce sales increase, returns are becoming a bigger and bigger hit to retailers.”

Strasmann expects return-policies to become less customer friendly in the future, but he said, for the time being companies are desperate for market share so they are willing to take the hit even as some customers buy multiple versions of products they know they are not going to keep, like shoes in several sizes.

The trick for retailers is to get goods back on store shelves as quickly as possible to resell them at full price. But items – especially clothes and shoes – can quickly go out of style, so returned items are often resold to discount stores or even destroyed at landfills, costing retailers 4.4 percent of total revenue each year.



ShipGooder Testimonials

Join our Newsletter

Your privacy is important to us and we will never rent or sell your information.


Go up