Down to Business: Tis the season for returns, to the tune of $100B annually


I headed to the mall retailer early one weekday, hoping to slip in quickly to exchange a Christmas sweater.

It was Dec. 2, and the sweater was from Christmas 2020 – that very COVID holiday spent opening gifts with family remotely via online conferencing.

The sweater was a lovely shade of mint but just didn’t fit well, so I set it aside to be returned. I’m embarrassed to say it spent most of 2021 on a corner of a dresser and at the bottom of my to-do list as COVID surged and ebbed, surged and ebbed, and other things crowded in for attention.

But as the year-ago purchase date on the gift receipt drew nearer, I was determined to exchange the sweater for store credit. And to my surprise, the process was painless.

For non-procrastinators, prime holiday return season is here, stretching roughly from late December to early February. It can mean long lines and frayed nerves for both shoppers and retailers, with the added twist for the latter of a hit to the bottom line.

In 2020, some $100 billion in merchandise – about 13 percent of all U.S. holiday sales – went back to retailers as returns, according to the National Retail Federation. The group has not yet released data on 2021 returns, but sales for the just-completed season were expected to be significantly higher than in 2020, likely meaning a rise in returns, too.

Optoro, a reverse logistics provider, collaborated with national commercial real estate broker CBRE to assess the likely state of returns in 2021, predicting that two out of three consumers would return at least one Christmas gift, pushing some $120 billion in goods back into the supply chain. (That’s where the phrase “reverse logistics” comes from. And just as distributions centers play a role in getting products out to stores, commercial space is needed, too, for returns.)

The companies’ report pegged the cost to retailers for a return at two-thirds of the product price, figuring in processing, transportation and discounting/liquidation. For the average $50 item, then, the return cost is $33; for high-value electronics, it is multiples more.

Despite the costs and headaches, though, the National Retail Federation advises businesses that “Returns are good.”

“Your best shoppers make the most returns,” the group says. “Returns are a chance to increase interaction with that consumer, provide them with a great experience, and engender their loyalty for future shopping trips.”

That seemed to be the spirit in my very late 2020 return to a national chain, and I became a teaching moment to boot.

The store associate initially indicated they no longer carried the sweater I wanted to return, but figured out a comparable product to calculate my store credit, all the while talking through what he was doing with a seemingly newer employee.

Ten minutes later, I was on my way.

Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]

Categories: Business

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