Shoppers Love the Era of Free Returns. Retailers, Not So Much. | Global News Avenue

You’re not the only one worried about whether your relatives will return the gifts you received this year.

Retailers are bracing for a surge in returns this holiday season, underscoring the tension between consumers who expect easy and free returns and companies worried about the cost of the convenient experience.

Online shoppers are likely to pay more attention to return policies during the holidays, according to a survey of consumers and retailers released last week by the National Retail Federation. That raises the stakes for companies hoping to get a piece of the estimated $980 billion. The trade group expects Americans to spend this winter.

About three-quarters of consumers rate free returns as an “important” consideration when shopping online. According to a survey conducted by NRF in partnership with UPS Happy Returns, nearly half of people decide not to purchase items that cannot be easily returned (ups) Companies that facilitate returns. (Supply chain technology company Blue Yonder said in September that number was even higher among younger consumers.)

The NRF said retailers are adding staff and expect return rates during the holiday season to be nearly 20% higher than normal. About a third are hiring employees to handle returns in warehouses, stores and corporate offices, the survey shows.

Nearly a fifth of sales expected to be repaid in 2024

Holiday spending has been strong so far, largely due to Online sales soared. But inflation in recent years is still weighing on Americans, and analysts generally expect consumer spending to grow humbly — about 3% higher than last holiday season.

The retail trade group said processing returns remains a challenge long after the holidays, as the number of returned items has soared in recent years. The National Retail Federation said businesses on average expect to return 17% of 2024 sales by the end of the year, more than double the roughly 8% return in 2019.

Pressure on logistics operations and warehouses is forcing three out of five retailers to choose between using resources to fill new orders or handle returns, the survey said. As the costs of shipping and processing these items continue to rise, more and more retailers are charging customers fees for certain types of returns.

All of this appears to put retailers in a tricky spot: Many want to enhance the returns experience, but at the same time want to reduce the frequency with which customers use returns, the NRF said.

“Improving the returns experience and reducing return rates are seen as the two most important factors for businesses to achieve their 2025 targets – ahead of increasing online sales,” the trade group said.