There are sales and then there are the sales that just don’t stick.
A whopping $428 billion in goods were returned to retailers last year — about 10.6 percent of total U.S. retail sales, a figure in line with the trend in recent years, according to a report from the National Retail Federation and Appriss Retail. The top categories for returns were parts (19.4 percent), apparel (12.2 percent), home improvement (11.5 percent) and housewares (11.5 percent).
The study found that roughly 5.9 percent of returns were fraudulent, making for a $25.3 billion hit to the industry one way or the other.
“Last year we saw an increase in returns of online purchases as the pandemic forced more consumers to shop online,” said Mark Mathews, the NRF’s vice president of research development and industry analysis. “Retailers view the return process as an opportunity to further engage with customers, as it provides additional points of contact for retailers to enhance the overall consumer experience.”
While returns overall have held steady, online returns more than doubled last year as e-commerce grew and stores were closed or people were staying home to social distance, or curtailing spending for economic reasons.
About 18 percent, or $102 billion, of goods bought online were returned online, with about $7.7 billion of that considered fraudulent.
The report was based on a survey of 62 retailers conducted in late October and early November and also found that, going into the holiday season, retailers expected 13.3 percent of what was sold to come flowing back in returns.
That’s a figure that’s more important than ever given how much retailers were depending on holiday sales after an extraordinary year.
Retailers and brands have increasingly worked on ways to manage returns, hiring more workers to process packages as they come back or investing in fit technology to help consumers make better guesses on size the first time around.
Stitch Fix Inc., a next-gen retailer, has built a business model that optimizes for returns, expecting something will be returned when items are sent in a “fix” and baking that cost in at the outset.
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