- Jackie Mallon
The season of festive cheer is over for retailers as they face the annual avalanche of returns. Online retailers are hit hardest, particularly clothing sites, as purchases online are three times more likely to be sent back including fifty percent of all clothing purchases. The process of returns has never been easier but the scale of unwanted product creates new problems.
Forecasts by Deloitte reveal that Americans will have spent 1.1 trillion dollars during this holiday period, up almost 5 percent from 2018. According to the Financial Times, Americans have returned one hundred billion dollars of those items already between the period of Thanksgiving and Christmas. Parcel delivery service UPS estimates it will process a record high number of returns, about 1.9 million, up 26 percent on last year, peaking on January 2nd. Annually around five billion pounds worth of these returned goods goes to landfill.
The convenience of a generous returns policy encourages in shoppers a more reckless attitude to splurging, as they order copies of the same style in different sizes and colors to try at home, before sending back all those that don’t work. While apps such as Sizer and MTailor can go some way towards aiding consumers to choose the correct size the results do not entirely remove consumer uncertainty.
Retailers suffer record rates of returns post-holiday season
A common sight in gifts this holiday season has been the QR code reassuringly in full view. When friends or family give you an unsuitable present you no longer have to get out of your pajamas to go stand in long lines instore like in holiday seasons of yore, but just scan the code, and with free shipping and nearby drop off locations, evidence of how little your loved one understands you is swiftly gone.
A generous return policy has become a deciding factor for consumers choosing one retailer over another, but it is also a business risk that companies must figure into their season’s projections. Retailers have had to confront the reality that tightening restrictions on returns could mean losing customers in a highly competitive market as consumers have come to expect the process of offloading unwanted items to be easy. Retailers so far have been more than obliging to customers’ whims, and leading the way is Amazon which offered 18,000 drop-off locations this year, including Whole Foods, and struck a deal with Kohl’s to allow its customers to return purchases there also.
But Forbes predicts that the upcoming quarter’s earnings calls will focus on the topic of returns and 2020 will be the year retailers attempt to turn the tide on this most untenable of situations. Already some stores allow a cash refund only if you are the original purchaser with the credit card to prove it, not the gift recipient armed with a gift receipt who will only be offered a merchandise credit. Going forward, online consumers should watch out for minor policy changes being put into effect such as retailers not including prepaid shipping labels with purchases or insisting customers make their returns in-store. These could be signs that larger policy changes are on the horizon.
Fashion editor Jackie Mallon is also an educator and author of Silk for the Feed Dogs, a novel set in the international fashion industry.