In December, more than one million returns occurred each day before Christmas. This week was predicted to be the heaviest reverse logistics week ever with January 3 predicted as the highest, dubbed National Return Day. The returns delivered in 2017 were part of the 750 million packages UPS delivered between Thanksgiving and New Year Eve, a nearly 40 million increase from last year.
FreightWaves reached out to UPS, and Natalie Godwin confirms January 3 was the biggest day. Even with the historic weather patterns and the bomb cyclone, the returns must get through. 1.4 million returns happened on Jan. 3, a fifth consecutive annual record, up 8% from prior year. According to Optoro, January is the peak month for the retail returns business, seeing 51% of the returns in a given year.
Godwin says that UPS alone will deliver approximately 6 million packages back to retailers during this first week of January. Record breaking Black Friday and Cyber Week e-commerce sales jumpstarted the holiday returns season, with a larger flood of packages going back to retailers, even while many presents sat under the tree, according to UPS.
“While the day after Christmas used to be reserved for long return lines at department stores, the growth of e-commerce has changed when and how consumers return gifts,” said Alan Gershenhorn, Chief Commercial Officer. “A customer-friendly returns program is now an essential part of any successful e-commerce program, and UPS continues to expand its suite of innovative solutions to help shippers. This season, UPS added Returns Manager, a free platform that allows e-commerce merchants to customize return shipments according to their e-tailer policy.”
Returns are a burden retailers (and even sellers) should be prepared to handle if they want to become “exceptional,” retail strategist Kevin Kelly told Adweek.
“The companies that open their arms and welcome these returns exceed their expectations and strengthen the relationship with the client,” said Kelly. “When you celebrate returns, you gain that small competitive edge that will lead to customer loyalty long term.”
It comes down to matching the competition’s policies: If your competitor is offering free returns, competitors should do the same. However, paying for return shipping isn’t currently a viable business strategy. Companies are thinking about how to incentivize people to bring products back to a store or store affiliate.
The returns piece of retailers business strategy may not be sustainable, but in the meantime parcel carriers like USPS, UPS and FedEx have developed and evolved to create impressive approaches to tackling the complicated issues as efficiently and profitably as possible.
According to the 2017 UPS Pulse of the Online Shopper study, 75% of consumers have shipped returns back to the retailer, an increase of seven points from 2016. Also: 79% of those surveyed said free shipping on returns is important when selecting an online retailer; 44% said the top issue encountered when returning an item online is paying for return shipping; Top elements also include an easy-to-return online experience and a no-questions-asked policy.
As a result, many businesses have added or expanded returns offerings. “A simple and speedy experience should be part of the retailer’s toolkit to help increase customer loyalty while managing the cost of processing these returns,” added Gershenhorn. “UPS offers a portfolio of technology-driven returns services that help retailers deliver a premium experience.”
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NOVEMBER 7-9, 2023 • CHATTANOOGA, TN • IN-PERSON EVENT
The second annual F3: Future of Freight Festival will be held in Chattanooga, “The Scenic City,” this November. F3 combines innovation and entertainment — featuring live demos, industry experts discussing freight market trends for 2024, afternoon networking events, and Grammy Award-winning musicians performing in the evenings amidst the cool Appalachian fall weather.