Retailers to be buried in Christmas returns?

Does a digital Christmas also mean that an unseen number of presents will be returned? As the past few weeks have seen massive online purchases, American retailers are already bracing themselves for a tidal wave of returns.

Higher return percentage

The US Retail Federation estimates Christmas sales this year at 767 billion dollar (627 billion euro), more than 5% higher than the same period last year. However, there is a big ‘but’: about 13% of that, or 101 billion dollar (83 billion euro) in goods, will be returned according to the trade federation, Reuters reports.

The number of returns may be even higher, as many shoppers bought their gifts online this year for fear of the corona virus. Traditionally, the return percentage of goods ordered on the internet is much higher.

The return rate for clothes in physical stores is 5 to 8%, while online it is around 30%, says Rob Zomok, president of global operations at Inmar Intelligence, a company that handles around 600 million returns for retail and e-commerce every year. As a result, this year’s return rate is significantly higher.

Simplifying the process

So there is a lot of pressure to make the return process as efficient as possible. For example, Walmart and Target, among others, work with FedEx and UPS service points so that customers do not have to go to the shops. Others have set up dedicated outdoor pick-up points because the stores are closed or because only a limited number of customers are allowed in.

Mall of America and Simon Property Group malls have employed Narvar, a supplier of return management systems, to prevent customers from having to print return labels for parcels they drop off. A large number of retailers, including Amazon and Macy’s, have already extended the return period within which customers may return items.