Holiday shopping is expected to reach record levels this year but a growing share of those purchases will be returned. Returns in 2024 are projected to account for 17% of all merchandise sales, totaling $890 billion, up from 15% in 2023. The return rate is even higher during the holiday season, with retailers expecting returns to be 17% higher than the annual rate.
Online shopping and the pandemic have increased consumer comfort with buying and returning items, with behaviors like “bracketing” and “wardrobing” becoming more common. This has led to a 29% increase in consumers returning goods multiple times a month. Processing returns costs retailers an average of 30% of an item’s original price and can have negative environmental impacts, contributing to landfill waste and carbon emissions.
To address these challenges, retailers are implementing stricter return policies, offering buyback programs, and selling returned items to secondhand businesses. Some companies, like Patagonia and Ikea, have launched programs to resell returned items. Additionally, 33% of retailers, including Amazon and Target, now allow customers to keep items and receive a refund.
Return policies and experiences shape consumer shopping habits, with 76% of shoppers considering free returns as a key factor in deciding where to shop. Negative return experiences can discourage customers from shopping with a retailer again. Retailers are recognizing the importance of optimizing return processes and sustainability efforts to cater to consumer preferences and reduce the environmental impact of returns.
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