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It’s returns season, and retailers are feeling it

Kristin Schwab Dec 27, 2023
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SDI Productions/Getty Images

It’s returns season, and retailers are feeling it

Kristin Schwab Dec 27, 2023
Heard on:
SDI Productions/Getty Images
HTML EMBED:
COPY

For retailers, the busy period isn’t quite over yet. That’s because the holiday sales season has now transitioned into returns season. The National Retail Federation says Americans returned $743 billion in merchandise so far this year, which is nearly 15% of sales. But companies are working hard to make sure the habit doesn’t take a toll on their bottom line.

Most of us know what it’s like to open a box and realize that the sweater we bought is more brown in person than it looked online. 

“You have a certain expectation. Does it meet that expectation?,” said Tony Sciarrotta, executive director of the Reverse Logistics Association. 

Often… it doesn’t. The return rate for online orders is nearly double that of in-person shopping. Peter Sobotta, CEO of ReturnLogic, says that’s become expensive for retailers.

“Retailers invested a lot of money in forward supply, delivering packages in under an hour. But they failed to invest in reverse supply chains,” he said.

So now retailers are shortening return windows and charging shipping or restocking fees. 

That can also dissuade scammers. For every one hundred dollars in returned merchandise, retailers lose nearly fourteen dollars to return fraud. Sobotta says if you return products a lot, companies might use AI to flag that. 

“You’re returning a lot. Why are you doing that?,” he said.

Sobotta says sometimes big companies like Amazon will even blacklist shoppers who return too much.

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