Gift receipts in hand… As consumers settle back into post-holiday life, retailers face the daunting peak of the holiday-returns window (yesterday was National Returns Day). Analysts estimate that US shoppers will return as much as $173B worth of unwanted stuff from this holiday season. Those funky mittens aren’t just magically processed: transporting, sorting, and determining the condition of returned items is a huge challenge for US businesses.
Unwanted costs: A $100 online order costs merchants about $27 to process. Just 30% of returned items are resold (think: last season’s sweater), while much of the rest winds up in a landfill.
Package pileup: During the pandemic, shoppers cozied up to online shopping and frequent returns, and convenient habits die hard. Customers returned $817B in goods last year (double 2019’s level) with nearly 9 in 10 merchants reporting an increase in send-backs.
Throwin’ it in reverse… The US returns industry (or “reverse logistics”) is booming, worth nearly $1T in 2022. And as long as consumers keep admitting they hate their new pants, it’s projected to keep growing. Companies like Inmar Intelligence (North America’s largest) handle retailers’ unwanted goods — housing the misfit gifts in massive warehouses and determining, item by item, what’s fit for resale. As Big Returns grows, major shipping companies are getting involved: this fall, UPS acquired box-free return specialist Happy Returns.
Thinkin’ outside the box… Companies aren’t just easing their return headache by outsourcing: 40% of retailers (including H&M and Abercrombie & Fitch) have started charging shoppers for returns, while more than half (like Amazon and Walmart) have instituted “just keep it” policies for items worth as much as $300.