How Retailers Can Cope with Post-Holiday Returns

How Retailers Can Cope with Post-Holiday Returns

It’s the most wonderful time of the year for retail; everyone is all hopped up on eggnog and consumerism. And it shows. Year after year, many retailers make a majority of their sales in the fourth quarter. Although, just as fast as the holiday cheer came, it dissipates. Once December 26th hits, companies brace themselves for the influx of holiday returns.

As consumer behaviors change, retailers are learning to cope with new costs of doing business. Returns are free for customers, but retailers absorb it in the form of shipping fees, costs of assessing, repackaging, or selling the item at a reduced price. Some end up with a total loss as the remaining value isn’t worth it.

Returns of this magnitude cost retailers, but they are also proving themselves unsustainable. CNN reported that an estimated $380 billion of items are returned annually, $90 billion of which occurs during the holiday season. Also, five billion pounds of consumer goods will end up in a landfill, according to Optoro, a tech company that manages returns for companies.

Only half all returns resell at full price due to damages or open packaging. One quarter will go back to the manufacturer, and the remaining will go to secondary retailers or liquidators. This situation has left businesses to wonder how to prevent loss from returns and how to recoup costs from them. Some ways companies can do so are:

Restocking fees: These fees can help deter returns for expensive items such as electronics.

Return in-store: Buy online pick-up in store (BOPIS) proved hugely successful this Black Friday and Cyber Monday. This practice transfers to returns as well. If a customer bought online, allowing them to return in-store saves on shipping.

Personally check merchandise: A major benefit of in-store returns is a person thoroughly inspecting the item before issuing money or merchandise credit. The cause of many fraudulent returns are people replacing the product with something else of the same weight, or not returning all parts.

Keep receipts digital– Have a record to cross-check before administering the returns. Some customers attempt to make multiple returns from the same receipt.

Hire a returns management company– For an e-commerce company, in-store returns weren’t plausible, until now. Third-party companies are popping up that specialize in managing returns at a physical location.

Liquidate– Sell items to an online-auction, liquidation marketplaces.

Sell to the secondary market – Sites like Poshmark and eBay are full of buyers here are looking for secondhand items.

On the flip side– If you’re someone searching for returned merchandise, this is YOUR most wonderful time of year. Get started by looking for a liquidator like Direct Liquidation. Due to their relationship with name-brands and retailers, they will be on the receiving end of the holiday returns this season. This post-holiday period is an opportunity to receive merchandise at a fraction of the cost, leaving you with a higher profit margin.


Author:  Christine Duff

Christine wants to live in a world filled with cutting edge fashion, beautiful words and and an endless supply of leather jackets and boots. A product development grad of FIDM, she was the Editor-in-Chief of MODE Magazine where she reignited her love of storytelling. She has diverse experience within the industry with trend research, art direction and styling editorial spreads. She gained her most notable experience working in Los Angeles at the satellite operation for GQ and Vogue Thailand. Christine is passionate about social science and the role it plays in the consumer goods industry and apparel in particular.


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