A huge surge in online shopping during the pandemic was a savior for retailers, but it comes at a price.
NEW YORK – A huge surge in online shopping during the pandemic was a savior for retailers, but it comes at a price.
According to Narvar Inc., a software and technology company that manages online returns for hundreds of brands, customers are expected to return twice as many items as they did on last year’s vacation, costing companies around $ 1.1 billion.
Retailers don’t want returns, but they want shoppers who may not feel safe walking into stores to conveniently purchase things they haven’t seen or tried on in person.
Since March, people have been buying so much online that airlines like UPS and FedEx were already running at full capacity before the holiday shopping season. And online sales continue to grow. From November 1 through Tuesday, they were up 32% year over year to $ 171.6 billion, according to Adobe Analytics. The massive challenges of shipping COVID-19 vaccines in the coming weeks and months could put the system under further pressure.
That means shoppers who return items may not receive a refund until two weeks after they have been returned to the store, said Sara Skirboll, a purchasing expert on the deals website RetailMeNot.
Many companies have more locations where customers can drop off returns, which reduces shipping costs and enables customers to get refunds faster.
Last year, Kohl’s started allowing Amazon returns in all 1,000 stores – customers drop off items for free with no box or label required. This year, Amazon customers can also return items at 500 Whole Foods Market stores. This applies in addition to Amazon’s contract with UPS to enable similar charges in UPS branches.
Happy Returns, a Santa Monica, California-based startup that works with about 150 online retailers such as Rothy’s and Revolve, has increased its number of dispensaries from more than 700 in the last year to 2,600. This includes 2,000 FedEx locations.
“It’s a great time to be in the returns business. There’s a record every day,” said David Sobie, CEO and co-founder of Happy Returns, noting that he processed 50% more returns in December than in November .
Walmart, the country’s largest retailer, announced earlier this week that it will be collecting free items from customers that are shipped and sold by Walmart.com under a new partnership with FedEx. The service will continue beyond the Christmas business season.
A growing number of retailers are asking buyers not even to return certain rejected items.
When Dick Pirozzolo tried to return an under-sized jersey that he had bought for $ 40 on a website called Online Cycling Gear, he was pleasantly surprised by the response. The site told him to keep it, throw it away, or give it to a friend or charity – and it will send him the right size for an additional $ 10.
“I was okay with that,” said the 77-year-old cycling enthusiast from Wellesley, Massachusetts. “I did a good thing for a friend and got a new shirt.” The experience, he says, has given him the confidence to buy more online this holiday season.
David Bassuk, global co-leader of the AlixPartners retail practice, says stores are making it increasingly easier for shoppers to feel less guilty about returning items.
“If you’re not sure of your size, order both sizes,” he says. “If they’re not sure what color they are, order both colors. And if they’re not sure which item to order, order them all. But it’s expensive for retailers, and retailers are not well positioned to bear all the costs. ” “”
According to Forrester Research’s online analyst Sucharita Mulpuru, customers return an average of 25% of items purchased online, compared with just 8% of in-store items. In clothing it is even more, around 30%.
However, experts say that not all rejected items are the same and have different write-offs. After an item has been returned to the retailer, the company must assess its condition and decide whether to resell it, send it to a liquidator, or send it to landfill.
Optoro, a logistics company, estimates that the value of fashion clothing decreases by 20% to 50% over a period of eight to 16 weeks. This is why it’s so important to get rejected items back on sale quickly.
Returns are also complicated this year as retailers have urged people to buy Christmas gifts early to avoid shipping delays and overcrowded stores. This means that the return window may be closed when Christmas is around.
Amazon allows customers to return items by January 31st for items shipped between October 1st and December 31st to give customers more time to decide. Last year the policy did not include items that were sent out in October.
Rachel Sakelaris, 25, of Newport Beach, Calif. Bought her boyfriend a waterproof backpack on Black Friday and then discovered they had a 30-day return policy. She decided to postpone the gift exchange until last weekend so that he had time to come back if he didn’t like it.
Buying too early can present other dangers.
Sarah Huffman, 40, from Chesapeake, Virginia, wanted to kick off the holiday season and spent $ 600 on gifts in May, including $ 60 pajamas and a $ 90 Xbox game for her five children .
But then her husband, a disabled veteran, quit his job because he felt his boss was too casual with COVD-19 safety protocols. Now her family is struggling to put food on the table and they cannot return some of the gifts she bought because the return window has expired.
“I’ve tried to reduce the stress of the pandemic by buying early,” she said. “I didn’t know that fundamental life choices would hit a new low.”
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