How Taxing Is Online Return Season on Retailers?

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Dec. 27 (Bloomberg) – Bloomberg’s Olivia Sterns discusses the impact of returns on retailers. She speaks with Betty Liu on Bloomberg Television's “In the Loop.” (Source: Bloomberg)

Pressure to cut prices?

Consumers are coming to expect that.

50% off is the base case we have seen across the retail spectrum.

Some retailers at the high-end who think they can preserve brand equity keep prices at relatively elevated levels.

In talked about -- lulu lemon held prices.

Buckle is a teenage retailer that introduces a number of products to see what will be successful.

Finally, anthropology, which is owned by urban outfitters, an upscale brand, where people are not so much buying gifts, but buying stuff for themselves.

Now, the advantage of this strategy is obvious -- you preserve operating margin.

One retailer that has discounted less, not resisted entirely, hasn't michael kors with margins of 30%. lulu's margins are also elevated.

The buckle, urban outfitters and express as well.

Managing margins is the benefit.

What about the risk?

People do not shop at your stores because they can get discounts at the store next door.

That could present a risk to l ulu lemon, where other competitors have come in.

Uncle courses holding steady.

The growth for -- michael kors is holding steady.

The buckle is down slightly.

We will see how this strategy bears out because they are in the minority.

They are indeed in the minority because people are walking away with huge discounted items.

Where do we go from here?

Retail stocks have been rallying, which is unusual because all we have been hearing is negative.

The s&p retail index is at new highs on anticipation that things will turn around in the new year, the economy is getting better, and the fed is finally tapering, yet if you look at the patterns, there is no guarantee.

If consumers are getting used to permanent lower prices, that could be more problematic for retailers on a longer-term basis . we will know more as the numbers roll in.

We will see the numbers crunched.

Julie hyman, thank you.

Maybe you did the thing people do during the season, get the gift, return it, and then go buy something else.

The return season is kicking off.

In particular the online return season and a couple of things are driving that.

More generous shipping policies.

Free shipping, free returns, that used to be rare, and when there is no financial penalty, you are more likely to hit check out.

Also, there are deep discounts

This text has been automatically generated. It may not be 100% accurate.

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