SAN DIEGO — The period following the holiday season has become increasingly notorious for its surge of gift returns, which is creating ripples across the retail industry. Data from Salesforce indicates returns could account for as much as 17% of total merchandise sales, equaling approximately $890 billion for 2024 alone. With consumer expectations high, many gifts do not meet the mark, leading to vast numbers of returns each January.
Caila Schwartz, Director of Consumer Insights at Salesforce, shared insights on the present challenges retailers are facing. "We're going to see more retailers charging for returns, shorter return windows, and potentially merchandise categories..." Schwartz warned, indicating tougher policies are looming as retailers focus on controlling the costs associated with returned products.
The surge is not just about items being returned; trends like 'try-on hauls' and 'bracketing' where shoppers order multiple sizes or colors to try on at home have driven return rates 36% higher than last year, according to the data from Salesforce.
For shoppers, this post-holiday return shopping ritual can be overwhelming. A customer visiting Kohl's shared her experience with WRAL News, advising others to, "Just be patient. The longer you wait, the more of a line there will be, so just bring your patience with you." Indeed, the day after Christmas can feel frenetic, with many stores experiencing substantial crowds and long lines.
Meanwhile, retailers are not just standing by; they are adapting to the burgeoning phenomenon of gift returns. Companies like Apple have shortened their return windows, allowing returns only until January 8th. Other retailers, such as H&M and Zara, are now imposing fees on online returns—a significant shift for many consumers who have benefited from lenient policies.
This shift raises concerns not just for consumers but also for the bottom line. Schwartz elaborated, "This is probably one of the busiest holiday seasons for returns." The ripple effects of plunging return rates could mean increased prices moving forward, compounding concerns for both consumers and retailers alike.
Gift cards have also taken center stage during the holiday season, noted as the second most popular gift after clothing, with Americans spending nearly $30 billion on gift cards this season alone. Chip Lupo, WalletHub writer and analyst, advised caution when it came to hidden fees associated with gift cards. “Some gift cards might tack on an inactivity fee after a year or so if there's no use on it, which could reduce their value,” he commented.
For many Americans, the choice after receiving unwanted gifts is whether to return or regift. A recent Bankrate survey indicated differing attitudes toward regifting; 33% of adults felt it was acceptable to repackage unwanted items, and another 30% admitted to having regifted previously. Valerie Sokolosky, a marketing strategist, encouraged this trend of regifting, stating, “Regift to someone you are sure will appreciate it.”
Yet, what if regifting doesn’t feel right? “If regifting doesn’t feel right, donating the item to a charity, a Goodwill store, or a community organization is another great option,” suggested Karene A. Putney, business consultant. The act of donating can allow for feelings of goodwill, and reduces the waste associated with returning unwanted gifts.
Experts are also zeroing in on the environmental impact of returns. Clean Hub, a nonprofit focused on environmental issues, points out how each return increases carbon emissions due to additional shipping and packaging. This growing concern might influence consumer behavior and retail policies moving forward.
With insights from various industry experts, it’s clear the retail environment faces significant changes as consumer behaviors evolve. Analysts foresee continued increases in return rates, driven by both online shopping habits and consumer expectations. Looking toward the future, Katherine Cullen, the NRF's vice president for industry and consumer insights noted, "Many are prioritizing their returns capacity to..." ensuring they cater effectively to their consumers.
This post-holiday return surge encapsulates more than just numbers; it’s about people and their preferences, as well as the broader economic impacts on retail strategies. For both retailers and consumers, being informed about return policies, potential fees, and new trends may ease the transition from holiday celebrations to the realities of post-holiday shopping.
