After the holidays, there’s another seasonal rush on the stores – for returns.
Last week the chain of seven Games by James stores in Minnesota and Wisconsin was busy selling people returning products, using gift cards, or spending Christmas bonuses, said owner Logan McKee.
“We definitely see it as an opportunity to get back to business … where they’re just as happy with a return as they are with a sale,” said McKee.
About $ 1 for every $ 8 in Christmas items has been returned after the 2020 holiday season, and some analysts believe returns will rise as the 2021 holiday season draws to a close.
Retailers invest most of their time and money in the hands of their customers. But they also invest more energy in processing returns in order to save money and score points with customers.
“A lot of the innovations we’ve seen in delivering products to customers … that doesn’t apply to the reverse supply chain,” said Kyle Goldschmidt, assistant professor in the Department of Operations and Supply Chain Management at the University of St. Thomas. “It’s always been this arduous, slow process. You see a lot more innovation there.”
It was easy to group shoppers at the Ridgedale Center in Minnetonka on the Monday after Christmas. There were people without shopping bags who did their rounds to get exercise. Others were on break from school or were working leisurely rummaging through after-holiday sales. And then there were the returnees, in a hurry with packages and determined faces.
“We were on a mission,” said Julie Hansen as she walked through the mall with her son Elijah. Both of them put plastic bags under their armpits.
Hansen had bought the clothes for her son for the vacation online, but they didn’t fit. Elijah Hansen estimated that he had returned more items this year because more of his gifts were purchased this way.
John Duffy of Minneapolis took the escalator to return sportswear to his wife after returning some shirts that he received as gifts.
“My wife does the shopping, I do the returns,” joked Duffy.
Games by James, which has a location in the Ridgedale Center, started a year-end sales campaign after Christmas. As a result, McKee said, a lot of the people who have vacation returns still leave the store with something.
“Most of the people who come in right away are exchanging ideas,” he said. “You want something else.”
Stores hold most games for a week before putting them back on shelves. When hot ticket items like Funko Pop! Figures and Pokemon cards are being returned, the Games by James staff are working quickly to disinfect them and put them back on sale.
About 11% of US retail sales were returned last year, or nearly $ 430 billion worth of material, according to the National Retail Federation (NRF). During the holidays, the returns rise to more than 13%. Online returns for the year more than doubled in the past year compared to 2019 and were a key driver of overall growth in returns, according to the NRF.
“I still see returns as problematic,” said Goldschmidt. “Online shopping is increasing. Returns keep increasing because of the behaviors involved. When trying to buy a shirt, a lot of people buy two sizes and keep the correct size and give back the other. There is a lot of associated waste . “
Returns can end costs retailers a lot of lost revenue. According to Optoro, a reverse logistics company that has Best Buy and Target among its customers, it costs an average of $ 33 for retailers to process a returned item.
“Most consumers think that returns are simply put back on the shelves. In reality, it’s a lot more complicated, ”said Casey Chroust, senior vice president of Optoro, in an email. “Returns have many hidden costs, including transportation, storage, refurbishment, and liquidation. And many goods are never resold at full price. Retailers not only lose sales of the returned goods, they also incur enormous costs in processing that return.”
Despite the cost, returns are a customer service option for retailers, said Katherine Cullen, senior director of Industry and Consumer Insights at NRF, in an interview.
Many customers returning items to a particular retailer also typically purchase many products, so there is a chance during a return to build loyalty in the store, Cullen said. Most Christmas shoppers also prefer to return unwanted gifts at a store, which gives retailers a chance to interact with them, she said.
“A positive return experience can encourage a consumer to come back,” said Cullen.
The return experience has improved during the pandemic. For example, some have turned to third-party drop-offs, including other retailers. Customers can even bring unpackaged items and have them returned via QR code.
Early 2021, Optoro rolled out Express Returns, a nationwide network of parcel-less return locations, including more than 1,000 Staples stores.
Amazon.com, which worked with Kohl’s to facilitate returns, more skills added in 2020 by allowing more than 500 of its grocery stores in Whole Foods Market to accept returns without a box or label.
Happy Returns, which was purchased from PayPal in 2021 Expansion of his network by including more than 1,000 Staples stores last fall.
The supply chain issues that make it harder to get products into the United States from overseas have also pushed companies to get returned items back on shelves faster to alleviate inventory issues, said Goldschmidt of St. Thomas.
Minneapolis-based customer experience company Calabrio helps companies like outdoor clothing retailer Patagonia manage their service reps and analyze the calls they receive in their customer service centers, including when customers call about returns.
“If you are on the phone, it means something has gone wrong,” said Tom Goodmanson, President and CEO of Calabrio. “The best in the class [retailers] will take this opportunity to listen to customers and find out where they made mistakes. “
Some retailers occasionally allow customers to keep items instead of returning them. This can reduce costs and make a positive impression on customers.
Ultimately, returns are a by-product of discerning consumers who don’t think about how their retail hunger contributes to environmental waste, Goldschmidt said.
Returned inventory creates £ 5.8 billion in landfill waste every year, according to Optoro. It is common in logistics circles that about 25% of the returns are discarded.
“I think the best way to change some of these consumer behaviors is to just make them aware,” said Goldschmidt. “If customers know that when they buy two shirts one of them ends up in a landfill, it can change their buying behavior.”