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Merchants Inundated with Returns This Week

UPS is calling Wednesday “National Returns Day,” while in the UK, Royal Mail is calling today “Mail-Back Monday.”

Shipping carriers can barely catch their breath from a busy holiday shipping season when they’re inundated once again with some of the very packages they delivered to holiday shoppers. Welcome to Returns Week.

The UK shipping carrier expects the volume of return parcels to jump by more than 50% on January 4th due to consumers mailing back unwanted Christmas gifts and online purchases, according to a statement from the Managing Director Royal Mail Parcels released on Sunday.

UPS expects to deliver over 5 million returns by the end of this week, 500,000 more than last year.

But while returns present a revenue opportunity for shipping companies, they represent a big problem for retailers, many of whom had used generous return policies to attract holiday shoppers and boost conversion rates.

Royal Mail noted on Friday that 45% of small- and medium-sized sellers believe a good returns process makes consumers more likely to place an order. And UPS said recently that 67% of consumers said they look at a retailer’s return policy before they complete an order.

Another interesting factoid to ponder: When asked what percentage of gifts they received during last year’s winter holiday season they ended up returning, only 62% of those surveyed said zero, according to the National Retail Federation.

Online marketplaces such as eBay and Amazon are not immune from the pressure to present shoppers with a generous returns policy. However, they generally impose one-size-fits-all policies on merchants that can be difficult for those selling used or unique goods. Some sellers believe marketplaces have made it too tempting for buyers to abuse the returns process.

Some people may be in for a rude surprise – as we noted in November, Amazon was reportedly cracking down on chronic returners. But in general, sellers have the perception that Amazon is extremely generous to customers wishing to return items.

On eBay, sellers also worry about the problems of returns fraud. As we recently reported, some buyers use eBay’s SNAD policy to force a return, no matter what the seller’s policy around returns.

Returns fraud isn’t isolated to online merchants. Retailers told the National Retail Federation they estimate total annual returns to reach $260.5 billion in 2015, or 8% of total retail sales.

Of that, they expect 3.5% of the industry’s total returns to be fraudulent, a whopping $9.1 billion.

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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.