What to Know
- After this season’s peak holiday shopping days, retailers expect their return rate to be 17% higher, on average, than usual.
- By the end of 2024, returns are expected to total $890 billion.
- The growing amount of returned merchandise is a major problem for retailers, and comes at a high environmental cost.
After a strong start to the holiday season, consumer spending is on track to reach record levels this year. But many of those purchases will soon be returned.
Returnuary: The Busiest Month for Returns
December’s peak shopping days are closely followed by the busiest month for sending items back, which experts dub “Returnuary.”
How Returns Became an $890 Billion Problem
With the explosion of online shopping during and since the pandemic, customers got increasingly comfortable with their buying and returning habits and more shoppers began ordering products they never intended to keep.
Nearly two-thirds of consumers now buy multiple sizes or colors, some of which they then send back, a practice known as “bracketing,” according to Happy Returns.
Even more — 69% — of shoppers admit to “wardrobing,” or buying an item for a specific event and returning it afterward, a separate report by Optoro found. That’s a 39% increase from 2023.
What Happens to Returned Goods
Processing a return costs retailers an average of 30% of an item’s original price, Optoro found. But returns aren’t just a problem for retailers’ bottom line.
Often returns do not end up back on the shelf, and that also causes issues for retailers struggling to enhance sustainability, according to Spencer Kieboom, founder and CEO of Pollen Returns, a return management company.
For Shoppers, Return Policies are Key
Increasingly, return policies and expectations are an important predictor of consumer behavior, according to Happy Returns’ Sobie, particularly for Generation Z and millennials.
Three-quarters, or 76%, of shoppers consider free returns a key factor in deciding where to spend their money, and 67% say a negative return experience would discourage them from shopping with a retailer again, the NRF found.
Conclusion
As the holiday season comes to a close, retailers are bracing for the influx of returns that will follow. With returns expected to total $890 billion, it’s clear that this is a major problem for retailers. But it’s not just a financial issue – it’s also an environmental one. As consumers, it’s important to be aware of return policies and to consider the impact of our shopping habits on the environment.
FAQs
Q: What is the average return rate for retailers?
A: The average return rate for retailers is expected to be 17% higher than usual this holiday season.
Q: How much will returns total by the end of 2024?
A: Returns are expected to total $890 billion by the end of 2024.
Q: What is the environmental impact of returns?
A: Returns can generate a significant amount of carbon emissions, and often do not end up back on the shelf. In some cases, returned goods are sent straight to landfills, contributing to waste and pollution.
Q: How can retailers reduce the environmental impact of returns?
A: Retailers can reduce the environmental impact of returns by implementing sustainable return policies, such as allowing customers to keep items and receive a refund without returning the product. They can also partner with companies that specialize in returns management and sustainability.
Q: How can consumers reduce their environmental impact when shopping?
A: Consumers can reduce their environmental impact when shopping by being mindful of return policies and considering the impact of their shopping habits on the environment. They can also choose to shop from retailers that prioritize sustainability and have implemented environmentally-friendly return policies.
