Get Ready: Holiday Returns Season Set to Begin

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Delivery man with parcel box

The holidays aren’t just the season of giving; they’re also the season of returning. As soon as the onslaught of shopping subsides, the wave of returns begins. According to data aggregated by Shorr Packaging, a distributor of packaging products (and a company likely to be at its busiest at this point in the year), projected ecommerce returns will top $19 billion this holiday season, reaching nearly one-third of total ecommerce sales. In other words, returns are big business.

They’re also a key pain point — for both consumers and retailers, especially with reports suggesting that around 33 percent of products purchased online this year will be returned. That’s onerous for both parties.

Retailers advertise the option for consumers to buy online and pick up goods in-store, but in-store returns offer comparable benefits. Not surprisingly, the consumers surveyed earlier this year by location-based marketing platform Retale indicated a marked preference for returning or exchanging gifts in-store, citing a much higher degree of convenience than with the online return and exchange experience.

Free returns (in addition to free shipping) are an added incentive for shoppers, but convenience comes into play as well. In fact, according to survey data from Endicia, convenience factors, such as readily available shipping labels and automatic refunds, are what matter most to consumers.

Source: Endicia; Infographic courtesy of Shorr Packaging Corp.

As Greg Sterling noted in a recent Street Fight column, in an era of bricks and clicks, local retailers enjoy a critical advantage when it comes to processing returns. “The idea that a consumer can take a risk on an unseen item because it can be returned locally,” he said, “is a critical consumer confidence builder and competitive advantage for the local branch of a multi-location retailer.”

What’s more, in-store returns, even of items ordered online, give local retailers another opportunity to demonstrate leadership in customer service — a differentiator that can deepen relationships even with customers who are there to return products. Online retailers can facilitate returns per the above, but at the moment when the customer starts the process, there’s no one present to provide additional assistance or turn a return into a potential upsell.

Come January, we can expect post-mortems on last-minute delivery experiences and whether retailers and shippers met expectations. Warmer weather relative to last year may ease logistical challenges, especially with more attention and resources being devoted every year to facilitating consumers’ inveterate last-minute buying habits. But during the holiday season, we focus so much attention on when people buy, how much they spend, and whether it got there on time that we tend to overlook what happens once the gifts are delivered. An equal test of retailers’ — both online and brick-and-click — mettle will be making returns as easy as the purchase itself.

Noah Elkin is Street Fight’s managing editor.