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BizReport : Ecommerce archives : January 07, 2013

Retailers brace for huge volumes of returned gifts

Over half of American consumers are choosing to ship unwanted gifts back to online retailers rather than brave the January sales crowds to return them in person, while in the UK up to 40% of fashion purchases are returned during January.

by Helen Leggatt

FR0049.jpgA FedEx survey of more than 1,000 adults in the U.S. reveals that, of the 36% of Americans who expect to return a Christmas gift, over half (57%) will return items via the mail.

In the days following Christmas, returns to online retailers sent via the FedEx Ground network surged more than 25%. That rise is not surprising as free return shipping offers are one of the main drivers for online shopping, and many consumers prefer the ease of sending items back in the mail rather than brave the stores and malls.

In the U.K, up to 40% of fashion purchases and between 5% and 10% of electrical goods bought online are returned in January, according to new research from ecommerce consultant Javelin Group. That compares to a 30% return rate for fashion retailers throughout the year, as shoppers attempt to accurately assess sizing online.

Heikki Haldre, founder and chief executive of virtual fitting room provider, thinks that a 40% return rate is actually pretty good.

"Anecdotally I have heard of rates approaching 70% in January as unwanted or incorrect Christmas gifts and spontaneous purchases made during post-Christmas Sales are returned," said Haldre. "Irrespective of how return rates are reported or accounted for, or whether they are 40% or 70%, such levels must be crippling for retailers - just the impact on cash flow must be painful."

Tags: ecommerce, free shipping, online shopping, retail, returns policy, UK, US

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