It’s almost inevitable you will receive something for Christmas that you don’t want or doesn’t fit. Journalist Kelly Tyko (@KellyTyko) writes, “The thoughts that creep up moments after opening an unwanted gift might go something like this: How do I get rid of it? Darn, no gift receipt. What time do stores open tomorrow? Is there anyone I can regift this to?”[1] She calls the days after Christmas an “annual return-a-thon.” In times past, lines of people could be found at department store returns windows hoping to get a refund, exchange, or store credit. This year the return-a-thon will be different — with longer lines likely to be found at post offices and parcel package stores than at department stores. That’s because the pandemic has dramatically increased the amount of shopping consumers are doing online. With greater online sales, comes increased returns. Matt Leonard (@Matt_Lnrd) reports, “The rate of returns through the e-commerce channel falls anywhere between 15% to 30%, according to a report [from CBRE and Optoro]. … The overall rate of returns is growing about 10% annually, which is straining storage space as the reverse logistics process can require 15% to 20% more space than outbound logistics.”[2] The increase in e-commerce means having an effective and efficient returns process is essential for most retailers. Leonard notes, “An efficient reverse logistics process is especially important for products that depreciate in value quickly, like apparel, which can lose 20% to 50% of its value in eight to 16 weeks.” There are two sides to the returns story. One side involves the person returning a product; the other side involves the supply chain that must deal with returned products.

What to do if you are returning a product

Tyko offers a lot of worthwhile suggestions about how to handle unwanted or damaged gifts. They include:

Know the policies, deadlines: Tyko recommends reading about policies at store websites, on store signs or on the back of receipts. Miss a deadline and you could be out of luck.

Avoid the crowds: According to Tyko, “Early mornings and late evenings can be less chaotic times to make a return, but immediately after Christmas, you should expect long lines. It might be best to wait a few days.” This advice holds true for both physical stores and parcel package locations.

Keep receipts: “Having an original or gift receipt usually makes the return process go more smoothly and improves your chances of getting a full refund,” Tyko writes. If you don’t have a receipt, Tyko indicates you should expect “a merchandise credit for the lowest recent sale price or possibly no refund or exchange at all, depending on the store’s policy.” If you actually like the gift, but need a different size or color, Tyko suggests, “Ask for assistance, and if it’s not in stock, ask a store associate if it’s available online or at another store location.”

How to deal with an unwanted mystery gift: Tyko writes, “Not sure where a gift came from? If it has a barcode, try scanning it with a smartphone app such as ShopSavvy, which is available for Apple and Android, or even try typing the barcode numbers on Google.” Nowadays some stores will accept returned merchandise even if it didn’t sell it. Anna Hensel (@ahhensel), an editor at ModernRetail, reports, “Some retailers are allowing customers to make in-person returns at other stores. Amazon, for example lets its customers return items at Kohl’s. This was a trend that has picked up the past few years — but it has accelerated in the lead up to the holidays this year.”[3]

Bring your ID: We live in an era of scams and the pandemic has brought out the worst in some people. Tyko writes, “Even if you have a receipt, some stores require a government-issued ID.”

Expect extra fees: According to Tyko, “If you are returning any electronics or an item that has been opened, be prepared to pay a restocking fee of up to 15 percent.”

Unhappy? Talk to a manager: “If you have a problem returning a gift,” Tyko writes, “contact the store manager or the retailer’s customer service department.”

Be nice: An old English proverb states, “You catch more flies with honey than vinegar.” The point is, getting what you want is generally more likely if you are nice. Tyko writes, “Some returns are granted on a case-by-case basis, so patience and kindness may go a long way.”

If your attempts to return an item result in failure, Tyko suggest selling or donating the item. “If you can’t return or exchange gifts,” she writes, “consider selling them on eBay or similar apps and websites. Or donate them.”

Retailers benefit from flexible returns policies

Hensel writes, “Given that people are expected to do more of their holiday shopping online this year in lieu of visiting a store, retailers are also bracing for the likely scenario that people will want to make more returns this year than ever before.”[3] Because returns have become such an important part of the digital path to purchase, retailers are learning that having a consumer-friendly returns process helps build customer loyalty. Hensel reports, “Many retailers have extended their return policies, giving customers more days to send back unwanted items. They’re also trying to give customers more ways than ever to return items. Retailers like Lululemon and Levi’s have made it easier for customers to initiate returns within their mobile apps, while returns processing startups like Happy Returns and Narvar have struck partnerships with companies like FedEx and Walgreens so that shoppers can make returns at more places than just a retailers’ store.”

Retail journalist Jason Del Rey (@DelRey) writes that liberal returns policies “may seem counterintuitive to the rise of e-commerce.”[4] He goes on to note, however, “[Such policies] can make sense for consumers and businesses alike. Shoppers get more free options for returns and … often, they can get quicker refunds, too. Retailers that regularly pay return shipping fees can cut down on costs as well. And in-person returns for online orders can be better for the environment, turning smaller, more frequent return shipments into fewer, consolidated returns.” And, as I noted above, flexible returns policies can also increase consumer loyalty. Steve Chambers, Vice President of Franchise and Business Development at The UPS Store, writes, “According to the UPS Pulse of the Online Shopper study, 73 percent of online shoppers say the returns experience affects their likelihood to buy from a retailer again. As shoppers adjust their purchasing habits, retailers also must adapt to meet and exceed the expectations of their customers.”[5]

Patrick Burnson, Executive Editor of Logistics Management, observes, “With the ongoing growth of e-commerce, the volume of returned inventory continues to rise for logistics managers in a variety of industry sectors. But arguably, it’s U.S. retailers who have felt the greatest impact in recent years. Indeed, the National Retail Federation (NRF) estimates that over $400 billion in goods are returned in any given 12-month time frame.”[6] For people wanting to return packages in person, retailers and shippers have to ensure they can do it in a safe and healthy environment. The cost of keeping consumers and employees healthy are added to other costs associated with returns that are borne primarily by retailers. That’s why making the returns process as effective and efficient as possible, while keeping it consumer friendly, is absolutely essential.

Footnotes
[1] Kelly Tyko, “Didn’t get what you want for Christmas? Thursday is a huge day for making returns,” USA Today, 24 December 2018.
[2] Matt Leonard, “2019 holiday returns could reach $41.6B,” Retail Dive, 23 December 2019.
[3] Anna Hensel, “How retailers are preparing for more returns than ever this holiday season,” ModernRetail, 14 December 2020.
[4] Jason Del Rey, “Online shopping is booming but so are returns. An old-school solution is gaining steam,” Vox Recode, 3 December 2020.
[5] Steve Chambers, “Simplifying the Returns Solution for Online Retailers,” Longitudes, 16 November 2020.
[6] Patrick Burnson, “Reverse Logistics Rides High on the Wave of E-Commerce,” Logistics Management, 2 March 2020.