90% of Consumers Go to Brick-and-Mortar Stores for Online Holiday Returns

90% of Consumers Go to Brick-and-Mortar Stores for Online Holiday Returns

December 27, 2016         Written By John H. Oldshue

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.

The information contained within this article was accurate as of December 27, 2016. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


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.
View all posts by John H. Oldshue
Featured Low Interest Card
Top Features : 1.25X miles on every purchase; no annual fee; bonus of 20,000 miles once $1,000 is spent in first 3 months
Featured Cash Back Card
Top Features : No Annual Fee, Bonus Offer, Cash Back
Featured No Annual Fee Card
Top Features : Earn cash back twice. 1% when you buy plus 1% as you pay; 0% APR for 18 months on balance transfers
Featured Bad Credit Card
Top Features : No Annual Fee; Cash Back match at the end of your first year; Social Security Alerts
Featured Fair Credit Card
Top Features : No annual fee; access to higher credit line after making first 5 monthly payments on time
Featured Limited/No Credit
Top Features : No annual fee; reports to major credit bureaus; access to higher credit line after making first 5 monthly payments on time