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BizReport : Ecommerce archives : November 20, 2015

Returns: Will your Black Friday lead to an Out of Stock Saturday?

A new report by returns intelligence firm Clear Returns predicts that, while records sales figures will be achieved this Black Friday, the overall picture is much less appealing once the true cost of returns is factored in.

by Helen Leggatt

According to Clear Returns' 'Playing for Keeps' report, while more than £1bn in online sales is predicted this Black Friday, the manic shopping day will result in £160million worth of stock being returned over the crucial Christmas period.

Their report also suggests that the cost of handling goods returned from this year's Black Friday will cost retailers over £130million, rising to £180million once lost margins, cleaning and storage of products, and lost customer lifetime value are factored in.

After all, a sale is only a sale if the item does not come back for a refund.

"On the surface, Black Friday is a successful key trading day, but it's a gloomier picture once returns are factored in," said Vicky Brock, CEO and founder of Clear Returns. "Our data suggests the true cost of acquiring customers during such promotions is likely to be very high; at peak trading periods anything between 15-50% of promotional items might be returned at a time when staff will be stretched to fulfil other more profitable orders in the run up to Christmas."

As if all the above wasn't enough, Clear Returns also warns that Black Friday sales could lead to Out of Stock Saturday as stock remains tied up in the returns loop.

Clear Returns_Infographic_FINAL_Resized.jpg

Blue Yonder recently warned retailers about the need for a strategy in place to manage returns, saying that the sheer number of returns could damage income from the big sales days. Last year, almost a quarter of shoppers that purchased an item said they later felt they did not need it, or wish they hadn't bought it, or returned it at a later date.

Image via Shutterstock

Tags: Black Friday, holiday 2015 trends, returns process

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