This holiday season, retailers brace for a surge in returns, a significant yet challenging aspect of the post-holiday period. Last year, retail returns amounted to approximately $816 billion, with the holiday season alone accounting for nearly $171 billion in returns.
The situation may worsen this year. Leading returns logistics service provider, goTRG reported that half of retailers now consider returns to be a "severe problem," a significant increase from the previous year. The rise of e-commerce has contributed to higher return rates, with nearly half of shoppers making returns every few months. To address this challenge, retailers are reevaluating their return policies. While e-commerce continues to thrive, November saw a 10.6% increase in year-over-year online sales.
Notably, retailers are adjusting their return windows, with over 40% planning to shorten them for the holiday season. Additionally, in the last 12 months, almost half of retailers have introduced return fees, following the lead of major players like Amazon and Zara. However, retailers must carefully consider the impact of tough return policies. While addressing fraud and abuse is essential, restrictive policies can deter shoppers. Research shows that return fees and shorter return windows can lead to a decline in customer loyalty and trust.
Transparency in return policies is crucial, as it significantly influences how customers perceive retailers. Retailers must balance the need for effective returns management with maintaining positive customer experiences, as well as fostering trust among shoppers.
Encouraging buy online, return in-store (BORIS) options can drive traffic to physical stores and should be part of the strategy. Additionally, it's essential to remember that frequent returners often represent a retailer's best customers.
Retailers must navigate the challenges posed by rising return rates during the holiday season while carefully considering the impact of their return policies. goTRG plays a crucial role in helping retailers optimize their reverse logistics and returns management processes to enhance customer experiences and mitigate losses.
