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Retailers Are Poised To Face A Huge Wave Of Return Of Goods

Retailers Are Poised To Face A Huge Wave Of Return Of Goods
Retailers in the United States are preparing for a record number of returns of online gifts which were bought during the period when there was a huge surge in novel coronavirus cases in the country.
Shoppers have been allowed to drop their unwanted gifts at FedEx or United Parcel Service drop-off sites by retailers including Walmart Inc and Target Corp in order to make the process more efficient.
And for the first time, curbside returns are being offered by other retailers including Best Buy, Dick’s Sporting Goods and Nordstrom, because physical stores have been closed down or the number of customers allowed inside has reduced in efforts to prevent the spread of Covid-19.  
Shoppers have shifted from purchasing products from stores to online platforms during the pandemic in an effort to prevent contracting Covid-19 which is expected to swell returns of products purchased to historically high levels. There is also pressure on retailers to keep the return process as seamless as possible in order to hold on to customers as well as making it easier for UPS and FedEx to operate even as the two delivery giants have been overwhelmed with packages to deliver,
Measures are also being taken even by some shopping malls to that returning of goods can be easy for their tenants. In order to eliminate the need for shoppers to print return labels for packages they drop off, partnerships with Narvar, a returns management provider, have been struck by the Mall of America and Simon Property Group.
An increase of as much as 5.2 per cent to $766.7 billion is expected for the 2020 holiday sales, according to estimates of the National Retail Federation. The trade group also anticipates that about 13 per cent of the goods sold, worth about $101 billion, of the products sold during the 2020 holiday season will be returned by customers.
The number of returned goods will be even higher, according to estimates of Optoro, which helps retailers sort, resell and dispose of returned merchandise. Between Thanksgiving and end of January, 2020 US holiday returns will hit $115 billion, it predicted. Compared to the same number in 2019, that will be 15 per cent higher.  
Rob Zomok, president of global operations at Inmar Intelligence, a firm that is engaged in processing about 600 million retail and e-commerce returns annually, said that while the online apparel return rate is about 30 per cent, the return rate for in-store apparel return is between 5 and 8 per cent.
“That math has created a significant increase in returns,” said Zomok, who added that apparel returns are at a record high.
“When your shopping is 100% online, you’re probably ordering a couple extra (items) with the intent of returning,” said Sriram Sridhar, chief executive of, which helps clients track packages.
“We expect every retailer to face around 50% more returns than they have faced in the years past during the holiday season,” Sridhar said.
Further, returned products are also quarantined or sanitized by retailers after they receive them so that such packages are free from the novel coronavirus.
“This is not the typical way returns are processed,” said Paula Rosenblum, managing partner at retail research firm RSR Research.

Christopher J. Mitchell

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