NEW YORK (Reuters) – As shoppers tuck their latest Christmas presents under the tree, US retailers brace themselves for a record stream of returns of online gifts purchased amid the deadly rise in coronavirus cases. To make the process more efficient, retailers, including Walmart Inc and Target Corp, allow shoppers to leave unwanted gifts at FedEx or United Parcel Service drop-off sites.
Others, including Best Buy, Dick’s Sporting Goods, and Nordstrom, are offering roadside returns for the first time, as attempts to stop the spread of COVID-19 have closed stores or reduced the number of customers allowed inside.
The returns will increase this year. Shoppers trying to avoid contamination have shifted from stores to online – where the return rate is historically higher. Retailers are also under pressure to make the process as seamless as possible for those shoppers who want to keep them as regular customers, and for UPS and FedEx, who are inundated with packages.
Even some malls are moving to make returns easier for their tenants. Mall of America and Simon Property Group are both working with Narvar, a returns management provider, to avoid customers having to print return labels for packages they drop off.
The National Retail Federation expects Christmas sales to increase by a staggering 5.2% in 2020 from last year to $ 766.7 billion. About 13% of the goods, or about $ 101 billion worth of goods, sold during the 2020 holiday season will be returned, the trade group said.
Optoro, which helps retailers sort, resell and dispose of returned goods, is pushing the number even higher. It predicts that the US holidays will reach $ 115 billion in 2020 between Thanksgiving and the end of January. That’s 15% more than the company’s 2019 forecast, which counts UPS and home furnishings retailer IKEA among its investors.
The return rate for in-store apparel is 5-8%, while online is about 30%, said Rob Zomok, president of global operations at Inmar Intelligence, which processes approximately 600 million retail and e-commerce returns annually.
“That math has significantly increased returns,” said Zomok, adding that returns on clothing are at an all-time high.
“When you shop 100% online, you probably order a few extra (items) with the intention of returning,” said Sriram Sridhar, CEO of LateShipment.com, who helps customers track packages.
“We expect each retailer to achieve approximately 50% more returns during the holiday season than in years past,” said Sridhar.
In addition, retailers also quarantine or sanitize products after they have been returned to ensure they are free of the virus.
“This is not the typical way returns are processed,” said Paula Rosenblum, managing partner at retail research firm RSR Research.
Kohl’s, which collects Amazon.com returns and sends them back to the e-tailer in bulk, has extended its own deadline for premium electronics.
It joins a host of retailers, including Walmart, Macy’s and Amazon, who are giving shoppers more time to return purchases – a step that could make it harder to resell seasonal items.
It’s vital that those products are converted for resale, especially for fast-fashion retailers selling trendy clothing, said Inmar’s Zomok.
“The window is getting short,” said Zomok.
Reporting by Anna Driver; Editing by Aurora Ellis