Holiday shopping is expected to reach record levels in 2024, but a growing share of those purchases are being sent back. Returns are expected to amount to 17% of all merchandise sales, totaling $890 billion in returned goods, up from 15% in 2023. Returns are more prevalent during the holiday season, with retailers expecting a 17% higher rate compared to the annual average. This increase in returns is due to behaviors like bracketing and wardrobing, where customers buy multiple sizes or colors and return what they don’t want, or buy an item for a specific event and return it after. This process strains traditional systems and impacts retailers’ bottom line, costing them an average of 30% of an item’s original price to process a return.
The rise in returns also has environmental consequences, with a significant amount of returned goods ending up in landfills, contributing to carbon emissions and waste. To address this issue, retailers are implementing stricter return policies and offering alternatives such as buyback programs, reselling returned items, or giving customers the option to keep the product and receive a refund. Additionally, return policies and expectations are shaping consumer behavior, particularly for younger generations, with free returns being a key factor in deciding where to spend money and a negative return experience discouraging customers from shopping with a retailer again.Improving the return experience and sustainability practices are becoming key goals for retailers going into 2025.
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