- UPS is expecting to ship 1.9 million gifts and items back to U.S. retailers on January 2 (“National Returns Day”)
United Parcel Service is expecting to ship 1.9 million gifts and items back to U.S. retailers. The rapid rise of e-commerce is also fueling an anticipated 26% year-over-year volume jump on January 2 (“National Returns Day”), according to Reuters.
On January 2, U.S. shoppers return more packages than others around the globe due to free shipping on orders and returns, which is a costly perk that is known for hitting retailer profits.
Around 10% of goods sold in the U.S. go back to retailers every year thus resulting in about $369 billion in lost sales (2018 report from Appriss Retail and National Retail Federation).
IHL Group founder and president Greg Buzek told Reuters that clothing is one of the biggest contributors to returns due to inconsistent sizing across brands. “That causes great expense for retailers,” said Buzek. Buzek estimated that annual global losses due to retail returns are nearly $1 trillion – up from $600 billion in 2015.
But returns are creating new opportunities for startups. For example, LA-based Happy Returns has been dropping the cost of returns-related expenses up to 30% by reducing shipping costs and customer support calls.
Happy Returns offers 700 “return bars” at U.S. retail stores and shopping malls. These locations allow customers to drop off items and set up refunds or exchanges. And Happy Returns chargers retailers a flat fee for every item processed.
“You have to have some free (return) option. Nobody said it had to be the mail,” explained Happy Returns Chief Executive David Sobie via Reuters.
Amazon also has programs where consumers can return products at physical locations and lockers along with Kohl’s retail stores. Kohl’s packages the products and ships its back to Amazon for free.
