Retailers and shipping companies have struggled to get shoppers’ holiday gifts delivered on time. Now, they’re gearing up for what’s expected to be a brutal season for unwanted goods headed back in their direction.
Following a coronavirus pandemic-fueled surge in online sales, up to $70.5 billion worth of online holiday purchases are expected to be returned, up from $42 billion last year, according to a forecast from commercial real estate brokerage CBRE.
Many retailers that encouraged people to start their holiday shopping early extended return deadlines this holiday season, which may help spread out the returns. Some merchants also are trying to make it less of a hassle to get rid of unwanted items and get a refund. Still, returns aren’t as seamless as clicking “buy” online or contact-free options like sitting in the car and having an employee put purchases in the trunk.
It’s not just because people are buying more gifts online. It’s because there are more people shopping online, including some who typically prefer to shop in person and aren’t accustomed to buying online, said Steve Osburn, managing director of retail strategy at Accenture.
Shoppers also say they’re more likely to buy the same item in multiple sizes, then keep the one that fits.
About 62% of U.S. shoppers said they “bracketed” purchases, up from 48% last year, often because they gained or lost weight or were shopping at a new store and weren’t sure what size to pick, according to a September survey by Narvar, a company that helps retailers manage returns.
Retailers prefer shoppers return items in stores rather than ship them back because they can get items back on shelves more quickly, Osburn said.
But this year, the desire to avoid unnecessary trips to stores could push more people to seek mail-in options. About 30% of consumers surveyed by Narvar said it was easier to ship items back, up from 25% last year.
Walmart this week announced FedEx will pick up returns at customers’ homes. Customers still need to pack items for shipment, which can be tougher when people are working from home without access to a printer to print the shipping label, but the service is free for items shipped and sold by Walmart.
Earlier this month, Amazon announced customers can return items at 500 Whole Foods Market stores without a box or shipping label. Amazon already had a returns partnership with Kohl’s. Amazon shoppers also can return items at UPS locations, in some cases without packing them up.
Returns service Happy Returns partnered with FedEx this fall to let shoppers return items from brands like Everlane, Rothy’s and Steve Madden at 2,000 FedEx locations with no box or shipping label.
Happy Returns previously had about 600 locations, which were previously mostly at malls and retailers like Paper Source and CostPlus World Market. The new FedEx locations adds convenience while making the service “COVID-proof” since FedEx is an essential business that will stay open, said CEO David Sobie.
As return drop-off options have expanded, use has grown. Nearly 30% of shoppers surveyed by Narvar in September said they had taken their most recent return to a designated drop-off location like a pharmacy or another retailer’s store, up from 16% last year. About 35% of shoppers took their return to a carrier to mail back and 12% returned their item to the retailer’s store.
Some retailers are also trying to streamline traditional store returns.
Dick’s Sporting Goods will let customers return items through curbside pickup, as long as the purchase was made with a credit or debit card. Others say shoppers must come inside to make a return, though Narvar CEO Amit Sharma said he expects more retailers to announce curbside returns in January.