Retailers brace for flood of online shopping returns
NEW YORK » A huge surge in online shopping during the pandemic has been a savior for retailers, but it comes at a price.
Shoppers are expected to return twice as many items as they did during last year’s holiday period, costing companies roughly $1.1 billion, according to Narvar Inc., a software and technology company that manages online returns for hundreds of brands.
Retailers don’t want the returns, but they do want shoppers who may not feel safe going to stores to be comfortable buying things they haven’t seen or tried on in person.
Already at capacity
People have been doing so much online buying since March that carriers like UPS and FedEx were already at full capacity before the holiday shopping season. And online sales just keep soaring. From Nov. 1 though Tuesday, they spiked 32% to $171.6 billion, compared with the yearago period, according to Adobe Analytics. The massive challenges of shipping COVID-19 vaccines in the weeks and months ahead could put further pressure on the system.
That means shoppers who return items may not get refunds until two weeks after they’re sent back to the store, said Sara Skirboll, shopping expert at deals site RetailMeNot.
Many companies are offering more locations where customers can drop off returns, which cuts down shipping costs and gets refunds to shoppers more quickly.
Last year, Kohl’s began allowing Amazon returns at all of its 1,000 stores — customers drop off items for free, with no box or label needed. This year, Amazon customers can also return items at 500 Whole Foods Market stores. That’s in addition to Amazon’s deal with UPS to allow similar drop- offs at UPS stores.
Happy Returns, a Santa Monica, California-based startup that works with about 150 online retailers like Rothy’s and Revolve, has increased its number of drop- off locations to 2,600, from more than 700 last year. That includes 2,000 FedEx locations.
“It’s a great time to be in the returns business. Every day, there’s a record,” said David Sobie, CEO and cofounder of Happy Returns, noting he’s processed 50% more returns in December than November.
Walmart, the nation’s largest retailer, announced earlier this week it will pick up items shipped and sold by Walmart.com from customers’ homes for free through a new partnership with FedEx. The service will continue beyond the holiday shopping season.
A growing number of retailers are asking shoppers to not even bother sending back certain rejected items.
On average, people return 25% of items they buy online, compared with only 8% of what they buy in stores, according to Forrester Research’s online analyst Sucharita Mulpuru. For clothing it’s even higher, about 30%.