A huge increase in online shopping during the pandemic has been a savior for retailers, but it comes at a price.
According to Narvar Inc., a software and technology company that manages online returns for hundreds of brands, shoppers are expected to return twice as many items as during last year’s holiday season, costing companies about $ 1.1 billion.
Retailers don’t want returns, but they do want shoppers who might not feel safe going to the store to feel comfortable buying things they haven’t seen or tried yet.
People have been making so much online purchases since March that carriers like UPS and FedEx were already at full capacity before Christmas shopping. And online sales keep increasing. According to Adobe Analytics, online sales were up 32% to $ 171.6 billion from November 1 through Tuesday, compared to the same period last year.
The huge challenges of shipping COVID-19 vaccines in the coming weeks and months would be the delivery system. That means shoppers who return items may not receive a refund until two weeks after they are returned to the store, says Sara Skirboll, retail expert at deals site RetailMeNot.
“Good time to be in the return”
Many companies offer more locations where customers can drop off returns, reducing shipping costs and getting a refund to shoppers more quickly.
Last year, Kohl’s Amazon began allowing returns in all of its 1,000 stores – customers deliver items for free, without the need for a box or label. This year, Amazon customers can also return items at 500 Whole Foods Market stores. That’s in addition to Amazon’s deal with UPS to allow for similar drop-offs at UPS stores.
Walmart, the nation’s largest retailer, announced earlier this week that it will pick up items shipped by Walmart.com and sold from customers’ homes for free through a new partnership with FedEx. The service will continue after the holidays.
Happy Returns, a Santa Monica, California-based start-up that partners with approximately 150 online retailers such as Rothy’s and Revolve, has increased the number of delivery locations to 2,600, from more than 700 last year. That includes 2,000 FedEx locations.
“It’s a great time to work in returns. There’s a record every day,” said David Sobie, CEO and co-founder of Happy Returns, who notes that he processed 50% more returns in December than in November.
But the convenience of e-commerce makes for a lot environmental costs and costs retailers dear. Last year, returns from online shopping generated 5 billion tons of waste at landfills and produced as much carbon dioxide as 3 million cars that drove a year, according to Optoro, a return logistics company.
Stores for shoppers: just keep it
A growing number of retailers are asking shoppers not to even bother not to return certain rejected items.
When Dick Pirozzolo wanted to return an undersized jersey that he bought for $ 40 from a website called Online Cycling Gear, he was pleasantly surprised with the response. The site told him to keep it, throw it away, or give it to a friend or charity – and it sent him the right size for an extra $ 10.
“I thought that was fine,” said the 77-year-old cycling enthusiast from Wellesley, Massachusetts. “I did something good for a friend and got a new shirt.” The experience, he says, has given him the confidence to buy more online this holiday season.
David Bassuk, global co-leader of AlixPartners’ retail practice, says stores are making it increasingly easier for customers to feel less guilty about returning items.
“If they are unsure of their size, they order both sizes,” he said. “If they’re not sure what color to order, they’ll order both. And if they’re not sure what item, they’ll order all. But it’s expensive for the retailers, and the retailers aren’t well positioned to bear all the costs. ” “
According to a report by Narvar, the practice of buying multiple sizes or styles of a single item – known in the industry as “bracketing” – increased 50% during the pandemic. “Consumers were already in the habit of using their bedrooms as fitting rooms for online purchases, but the practice skyrocketed this year,” Narvar discovered.
According to Forrester Research online analyst Sucharita Mulpuru, people return an average of 25% of the items they buy online, compared to just 8% of what they buy in stores. For clothing it is even higher, about 30%.
But not all rejected items are the same and have different levels of depreciation, experts say. After an item is returned to the retailer, the company must assess its condition and decide whether to resell it, send it to a liquidator, or to landfill.
Optoro estimates that the value of fashion clothing will decrease by 20% to 50% over a period of eight to 16 weeks. That’s why it’s so important to get rejected items back on sale quickly.
Impact of early Black Friday
Returns have also been complicated this year as retailers have been pushing people to buy Christmas gifts early to avoid shipping delays and overcrowded stores, meaning the returns window may be closed by the time Christmas is coming.
Amazon allows customers to return items up to January 31 for items shipped between October 1 and December 31, giving customers more time to decide. Last year, the policy did not include items shipped in October.
Rachel Sakelaris, 25, of Newport Beach, California, bought a waterproof backpack for her boyfriend on Black Friday and then realized there was a 30-day return policy. She decided to move the gift exchange to last weekend so that he had time to come back if he didn’t like it.
Buying too early can bring other dangers.
Sarah Huffman, 40, of Chesapeake, Virginia, wanted to jump-start the holiday season and spent $ 600 on Amazon gifts in May, including a $ 60 pajama and a $ 90 Xbox game for her five kids.
But then her husband, a disabled veteran, quit his job because he felt his boss was too lax with COVD-19’s safety protocols. Now her family is struggling to put food on the table, and she can’t return some of the gifts she bought because the turn-in period has passed.
“I tried to take the stress out of the pandemic by buying early,” she said. “I didn’t realize that fundamental life choices would hit a new low.”