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Holiday shopping is expected to reach record levels this year, but an increasing amount of purchases are being sent back. Returns in 2024 are projected to make up 17% of all merchandise sales, totaling $890 billion in returned goods. This is a significant increase from the 15% return rate, equivalent to $743 billion, in 2023. The holiday season sees a surge in returns, with retailers anticipating a 17% higher return rate compared to the annual average. This trend is largely driven by online shopping habits developed during the pandemic, such as bracketing and wardrobing.
Processing returns can be costly for retailers, both economically and environmentally. It is estimated that returns cost retailers 30% of the original item’s price, and returns often do not make it back to the shelf for resale. This leads to issues with sustainability and can create a significant amount of landfill waste. In response, retailers are implementing stricter return policies, such as shorter return windows and restocking fees, to deter excessive returns.
Some companies are exploring alternative solutions to manage returns, such as buyback programs and reselling returned goods as secondhand items. Improving the returns experience and sustainability practices are becoming key goals for retailers. Consumer behavior is also influenced by return policies, with factors like free returns playing a crucial role in where shoppers choose to spend their money. In conclusion, retailers are reevaluating their return processes to mitigate costs and environmental impact while meeting consumer expectations.
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