After the holidays, there’s another seasonal rush to the shops – for returns.
Last week, the seven-store Games by James chain in Minnesota and Wisconsin tackled sales of people returning products, using gift cards or spending money on holidays, owner Logan McKee said. .
“We really see this as an opportunity to do business again… where they’re just as happy with a return as they are with a sale,” McKee said.
About $ 1 in $ 8 worth of holiday merchandise worth $ 8 has been returned after the 2020 holiday season, and some analysts predict that the amount of returns will increase as the 2021 holiday period draws to a close.
Retailers spend most of their time and money getting things in the hands of customers. But they’re also putting more energy into handling returns, hoping to save money and earn points with customers.
“Much of the innovation we’ve seen in getting products to customers… it’s not the same with the reverse supply chain,” said Kyle Goldschmidt, assistant professor in the operations department and of Supply Chain Management at the University of St. Thomas. “It’s always been this painstaking, slow process. You’re starting to see a lot more innovation out there.”
It was easy to regroup shoppers at the Ridgedale Center in Minnetonka on the Monday after Christmas. There were people without shopping bags who took walks to exercise. There were others taking a break from school or work, quietly browsing the post-holiday sales. And then there were the turnovers, walking hastily with packages and determined faces.
“We were on a mission,” said Julie Hansen, as she walked through the mall with her son Elijah, both putting plastic shipping bags in line under their armpits.
Hansen had bought the clothes online for his son for the holidays, but they did not fit him. Elijah Hansen felt he returned more items this year because more of his gifts were purchased that way.
John Duffy of Minneapolis took the escalator to return sportswear to his wife after previously returning shirts he had received as gifts.
“My wife does the shopping, I do the returns,” Duffy joked.
Games by James, which has a location at the Ridgedale Center, launched a year-end sales promotion after Christmas. As a result, McKee said, many people who have vacation returns always walk out of the store with something.
“Most of the people who come in right away are trading,” he said. “There is something else they want.”
Stores keep most games for a week before putting them back on the shelves. When popular items like Funko Pop! the Pokémon figures and cards are returned, Games by James employees are working quickly to disinfect them and put them back on sale.
About 11% of US retail sales were returned last year, or nearly $ 430 billion, according to the National Retail Federation (NRF). During the holidays, returns climb to over 13%. Online returns for the year more than doubled last year compared to 2019 and was a major driver of overall return growth, according to the NRF.
“I see returns continue to be more problematic,” Goldschmidt said. “Online shopping is increasing. Returns continue to increase simply because of the behaviors associated with it. If you are trying to buy a shirt, a lot of people buy two sizes and keep the one that fits and turn the other back. There is a lot of garbage involved in this.
Returns may end costing retailers dearly in lost income. On average, it costs retailers $ 33 to process a returned item, according to Optoro, a reverse logistics company that lists Best Buy and Target among its customers.
“Most consumers think returns are just put back on the shelf. In reality, it’s much more complicated,” Casey Chroust, senior vice president of Optoro, said in an email. “Returned goods have many hidden costs, including transportation, warehousing, refurbishment and clearance. And many goods are never sold at full price. . “
Despite the costs, returns represent a customer service opportunity for retailers, said Katherine Cullen, senior director of industry and consumer insight at NRF, in an interview.
Many customers who return items to a particular retailer usually also buy a lot of the product, so it is possible during a return to build store loyalty, Cullen said. Most holiday shoppers also prefer to return unwanted gifts to a store, giving retailers an opportunity to interact with them, she said.
“A positive return experience can encourage a consumer to come back,” Cullen said.
The return experience improved during the pandemic. For example, some have turned to third-party drop-off points, including other retailers. Customers can even bring in unpackaged items and have them returned just using a QR code.
Beginning of 2021, Optoro deployed Express Returns, a nationwide network of non-packaging return locations, comprising over 1,000 Staples stores.
Amazon.com, which has partnered with Kohl’s to authorize returns in delivery, added more capacity in 2020 by allowing more than 500 of its Whole Foods Market grocery stores to accept returns without boxes or labels.
Happy Returns, which was purchased in 2021 by PayPal, was extend your network including over 1,000 Staples stores last fall.
Supply chain issues, which make it more difficult to get products to the United States from overseas, have also prompted companies to get returned items back to shelves more quickly to alleviate inventory issues, a said Goldschmidt of St. Thomas.
Minneapolis-based customer experience company Calabrio helps businesses, including outdoor clothing retailer Patagonia, manage their service agents and analyze the calls they receive at their customer service centers, including when customers call for returns.
“If they’re on the phone, it means something is wrong,” said Tom Goodmanson, president and CEO of Calabrio. “The best of the class [retailers] will take this opportunity to listen to customers and find out where they went wrong. “
Some retailers sometimes allow customers to keep items instead of returning them, a move that can lower costs and leave a favorable impression on customers.
Ultimately, returns are a by-product of discerning consumers who don’t think about how their retail appetites contribute to environmental waste, Goldschmidt said.
Returned inventory creates 5.8 billion pounds of landfill waste each year, according to Optoro. It is a common belief in logistics circles that approximately 25% of returns are discarded.
“I think the best way to change some of these consumer behaviors is to just make them aware of it,” Goldschmidt said. “If customers know that when they buy two shirts one of them is going to end up in a landfill, it could change their buying behavior.”