90% of Consumers Go to Brick-and-Mortar Stores for Online Holiday Returns
The holiday shopping season has come to a close, but that doesn’t mean retailers will be getting a break any time soon. Now comes the dreaded task of processing returns for unwanted holiday gifts, a task that mostly falls on brick-and-mortar stores. Nearly 90% of consumers make returns for online purchase in physical stores, according to The Wall Street Journal.
While this surge of in-store returns may seem like a heavy burden for retailers, physical locations have a unique opportunity that ecommerce sites do not. When someone comes in to make a return, the physical store can make another sale, and it may be higher than the original purchase. This is one reason many retailers have big sales events after Christmas, not just to clear out inventory but also to make up for losses in returns. Most retail companies spend about 8% of their earnings on returns processing, but making a new sale can offset some of those expenses.
The National Retail Federation estimates about 10% of holiday purchases are returned. For online purchases though, that number can be as high as 30%. Black Friday online sales reached over $3 billion this year, and that represents only one day of the shopping season. Americans are shopping online more with each passing year, but that isn’t stopping them from making their returns in physical stores.
The NRF estimates $66 billion worth of this year’s holiday sales will be returned. Online-only stores like Amazon don’t have the option to make money from a new sale if an item is returned, which is why many of them will sell their returned inventory to third party companies, which in turn, resell them at a discounted rate.
About John H. Oldshue
John Oldshue is the creator of LowCards.com. He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for LowCards.com.