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This ‘Returns Week’ is a burden for online retailers

The holiday season is over and some consumers aren’t happy with their gifts and return them. But as more and more Christmas shopping happened online, products need to be returned to online retailers. Royal Mail called last Monday “Mail-Back Monday”, while UPS says today it’s “National Returns Day”. A great revenue opportunity for shopping companies, but a real burden for online retailers.

In a press release sent out last Monday, Royal Mail called that day ‘Mail-back Monday’, the first Monday in the New Year which was predicted to be the busiest day for online returns through the post. It predicted online returns would jump by more than 50 percent during that Monday alone, when compared to the average number of daily returns in December. Not a wild guess, if you take into account the number of return parcels had already increased 41 percent in the week after Christmas, again after comparing it with the average in December. Last year, one in six online shoppers claimed to have returned or were planning to return an online Christmas purchase.

46% of online shoppers returned clothing after Christmas
The most popular products likely to be returned are clothes, as 46 percent of online shoppers returned these after Christmas 2014. Toys and consumer electronics are other popular products to get sent back to the retailer.

In the US, it seems today is ‘National Returns Day’. That’s also the term UPS gives to this date where consumers are expected to make the most returned product shipments after the holiday season.

As Ina Steiner from EcommerceBytes puts it on her blog, returns may present a great revenue opportunity for shipping companies like Royal Mail and UPS, for retailers however it could be a huge problem. In order to attract holiday shoppers, they used generous return policies and now they are faced with the consequences. They have to handle all the shipments that are sent back. According to information from Inbound Logistics, “the average retailer’s reverse logistics costs for consumer goods are equal to an average 8.1 percent of total sales – a figure which, unlike forward logistics, includes the value of the goods.”

And of course, it’s not only handling returned items like products consumers may dislike or which doesn’t fit, retailers will also face some serious fraud cases. In 2014, retailers estimated that about 3.6 billion euros would be lost to return fraud that holiday season alone, an increase from 12 percent compared to 2013. “Overall, retailers polled estimate 5.5 percent of holiday returns are fraudulent”, NRF wrote back then.