Since UPS declared this past Wednesday “National Returns Day,” with over 1.4 million packages expected to be returned during this post-holiday period, does the growth of online shopping have a dark side?
Reverse logistics solution provider Optoro thinks so, and said as returns this holiday season are predicted to total $90 billion (driven by 16 percent online sales growth, according to Mastercard data) the downside is massive waste. The company estimates “that each year 5 billion pounds of landfill waste is generated by returns in the U.S.” Analysts at Optoro said that “as sales increase, volume of returns increase” and it is “exacerbated by e-commerce” as online sales transactions see higher overall return rates.
“Estimates of e-commerce returns vary from 25 percent of all goods bought online to upward of 50 percent for apparel,” the company said, adding that the rate of growth for returns is 10 percent year-over-year. Moreover, 24 percent of annual returns occur over the holiday shopping period.
In a survey of consumers, Optoro found that 88 percent of shoppers “aren’t aware that returns are often thrown away,” while 66 percent “think returned goods are placed back on the shelf and resold.”
Optoro noted that about half of the products returned go back into the store’s inventory. Some of it is donated while a portion is sold to liquidators. But the bulk of items end up in the trash simply because it is more cost-effective.
The survey also revealed that 40 percent of consumers return holiday gifts between Dec. 26 and New Year’s Eve while 51 percent return holiday gifts during January. Nine percent return holiday gifts after January. Regarding where the returns occur, 91 percent of consumers bring gifts back to the store. And while at the store, 57 percent picked up something that was on sale.
Other notable findings include that 46 percent of shoppers “abandoned an online shopping cart in the past year because the retailer didn’t offer free shipping on returns.”
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