Holiday shopping is expected to reach record levels this year, but a growing amount of those purchases are being sent back as returns. In 2024, returns are expected to amount to 17% of all merchandise sales, totaling $890 billion, up from 15% in 2023. The rise in returns is largely due to increased online shopping, with customers becoming more comfortable with buying and returning goods.
Issues arise when returns are not put back on the shelves, causing strain on retailers’ bottom line and environmental impact. Processing a return costs retailers an average of 30% of the item’s original price, and returns created 8.4 billion pounds of landfill waste in 2023. Some companies are implementing buyback programs and selling returns to secondhand businesses to keep goods in circulation and reduce environmental impact.
As a response to increased returns, retailers are rolling out stricter return policies, shortening return windows, and charging fees. However, improving the returns experience and finding sustainable solutions are becoming key goals for retailers in the coming years. Some companies, like Patagonia and Ikea, have launched buyback and resale programs, while others, like Amazon and Target, are allowing customers to keep the product and offering refunds.
Return policies are also shaping consumer behavior, with 76% of shoppers considering free returns a key factor in deciding where to shop. A negative return experience can discourage shoppers from returning to a retailer. Ultimately, retailers are exploring various solutions, including buyback programs, stricter policies, and enhanced sustainability efforts, to handle the growing number of returns and shape future shopping habits.
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