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Supply Chain News: Retailers say “Just Keep it!” for returns

January 2024

After the surge in holiday shopping comes the inevitable period of retail returns. Yet, retailers have another twist this year! Many are finding some retail returns too costly to process and telling consumers to “Just keep it” instead. Consider that:

  • U.S. consumers are expected to return about $170 billion worth of holiday purchases from the 2023 season.
  • That’s nearly 30% more than last year, according to Optoro, a retail logistics consulting firm.
  • All those coats, shoes, computers, and general household goods become a big headache for retailers, as they flow back to stores and warehouses to be checked in and restocked.

In recent years, retailers have added some creative measures to cut the cost of returns while also balancing the need to accommodate customers. This year many are using the “Just keep it” strategy on some items that are costly to ship back.

Retail returns and more returns

Retail returns from 2023 holiday shopping typically start the day after Black Friday and go into February. They are a significant strain on the retail system, as they have to be transported, sorted and then resold or thrown out for a loss.

In recent years, retailers have added a variety of options to cut down on their costs for returns, from offering store credit to charging for returns and encouraging consumers to bring online purchases back to their stores. “Easy returns are a significant marketing vehicle to build customer loyalty and develop a pipeline of repeat customers and lower customer acquisitions costs,” says Carl Quesinberry, Senior Director, Avison Young Consulting Services, who has extensive experience in occupier advisory services.

For the 2023 shopping season, nearly 60% of U.S. retailers surveyed were telling consumers to keep items that were too costly to ship back, such as small kitchen utensils or large furniture pieces, according to goTRG, a returns services firm that surveyed 500 executives with 21 major retail companies. About 26% of companies have such “no return” policies in place, but they are not always publicized due to concern over the potential for fraud.

For more on this trend and how it’s impacting retailers and warehouse operators, click here.

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