The rate of returns in the US continues to increase with no end in sight. Shifts in consumer behavior and the changes to retailer returns management policies to satisfy consumer preferences are fueling the increase. And the gap gets wider and wider.
Counting the Cost: How Rising Returns in the US Impact Reverse Logistics and Retail Margins
The cost of returns in the US is also pretty staggering. In 2018, the total value of returns was $369 billion, according to the National Retail Federation (NRF).
As you can see, returns can cause some serious industry issues in the reverse logistics space, such as a reduction in margin percentages, or an increase in labor cost.
Buy online and in-store (BORIS) returns are also a big problem for retailers with 38 percent of retailers seeing a rise in BORIS returns in 2018.
Sales Surge, Returns Follow: Understanding the Retail Return Spike Post-Holiday Shopping Season
We are almost at the midpoint of 2019 and Memorial Day is right around the corner. What does that mean? Lots of Memorial Day sales. This is great for retailers when looking at the upfront profits. However, what happens on the backend should be the focus.
Historically, return rates skyrocket after any holiday sale, from Black Friday to Memorial Day. There are plenty of reasons why this happens, and none of them matter. Retailers will not be able to fix the increase in holiday sale returns, because they need to ensure the customers are confident to buy.
And what better way than a 30-day, or even 60-day, no questions asked return policy.
To test this, we went to a few of America’s top retailers and asked about return policies on high ticket items like laptops, TVs, and video game consoles. Most employees said without hesitation, “You can return it within 30 days.”
We pried a bit more. We asked, “Can we open the box, play it for 28 days and return it?” The employee humbly said, “Yes, that’s no problem.” This is the dance retailers and consumers do day-in and day-out causing surmounting issues in returns management.
Rising eCommerce Returns: The Urgent Need for Effective Reverse Logistics and Returns Management Solutions
Many retailers have come to the conclusion that returns will need to be addressed in the next decade or so. The growth of ecommerce and the rising return rate are certainly not going away. What’s the solution savvy retailers have come up with? Reverse logistics and returns management software and value add services.
But this is where the great returns divide takes an odd turn. Consumers will ultimately be consumers. There’s no plugging that leak. So retailers need a solution on their end, which comes in the form of reverse logistics. And nearly two-thirds of retailers agree that reverse logistics is important.
However, when it is time to put the investment into a reverse logistics software that can recover profit on returns, less than 10 percent are willing to put money on the table. Not good.
Luckily, goTRG makes it easy for retailers to maximize recovery on returns with the fastest sell-through in the reverse logistics industry. Using SaaS technology, supported by machine learning and AI, we help retailers reduce movement of returns and touches. We are also leaders in recommerce and reverse logistics.
Nearly all the top retailers in the world trust goTRG business solutions and SaaS to handle their returns. Why? Because when you need it, we’re the ones that get it done!
