Holiday shopping is expected to reach record levels, but a growing share of those purchases are being returned. In 2024, returns are expected to amount to 17% of all merchandise sales, totaling $890 billion. This is up from 15% in 2023. The holiday season sees a higher rate of returns, with retailers expecting a 17% higher return rate compared to the annual average. Online shopping has led to customers becoming comfortable with buying and returning habits, with practices like “bracketing” and “wardrobing” becoming more common.
Processing a return costs retailers an average of 30% of an item’s original price. The environmental impact of returns is also a concern, with items often not being put back on shelves or ending up in landfills. Retailers are implementing strategies to reduce the number of returns, including stricter return policies, shorter return windows, and charging restocking fees. Some companies are also offering buyback programs, resale options, and selling returns to secondhand businesses.
Return policies and expectations are shaping consumer behavior, especially for Generation Z and millennials. Free returns are considered an important factor for 76% of shoppers when deciding where to spend their money. A negative return experience can discourage consumers from shopping with a retailer again. Overall, retailers are working towards finding a balance between accommodating returns while also reducing their environmental impact and maintaining profitability.
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