Retailers Should Brace for a Tidal Wave of Returns
The shift in shopping habits during the pandemic creates the potential for big headaches for companies that don’t plan for the deluge.
Not so many happy returns.
Photographer: Paul Ratje/AFP/Getty Images
Americans are in the final sprint of a record year of e-commerce spending, filling their digital carts with holiday gifts and decor in a year when public health concerns are keeping them away from stores. That online haul, though, foreshadows an unfortunate aftershock for retailers: A potentially unprecedented deluge of merchandise returns.
Online purchases have long had higher rates of returns than those for goods bought in stores, for obvious reasons: When you don’t try on or test a product before buying, you’re more likely to make a regrettable purchase.1 With e-commerce spending expected to grow 35.8% in the U.S. this holiday season, the safe bet is that returns will surge, too. Optoro, a so-called reverse logistics company that helps retailers manage returns, estimates $115 billion of merchandise will be returned between Thanksgiving and the end of January, compared with an estimate of $100 billion last year.