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Christmas returns to deliver hangover for retailers

 

Fashion retailers are bracing themselves for high volumes of returns this month after more shoppers opted to buy online over Christmas.

Royal Mail anticipated that January 4 would be its busiest day, with online returns up more than 50% against the average in December. 

It predicts nearly half of online shoppers (46%) will return clothing after Christmas – more than any other category. It will report its volumes for the Christmas period in full on January 21.

Retail intelligence company Clear Returns predicts that up to 10% of all refunds for the whole year will hit retailers before late January. Chief executive Vicky Brock says retailers who discounted before Christmas will suffer a “triple hit”.

“Not only do they lose margin on the sale item, they foot the bill for the cost of the return and, by the time the refunded item is processed, it re-enters the store at a marked down price, causing further loss of profits.” 

Independent retail analyst Richard Hyman pointed out that ecommerce typically has a higher rate of returns and estimated that up to 45% of purchases made online this Christmas will be sent back.

He added that there may be a spike in returns from shoppers who want to re-buy items at a discounted rate in the January Sales.

“This what retailers have been demonstrating to customers: that whatever they buy may well be cheaper next week,” he said.

Some retailers took action over the festive period to try to manage the influx, banning returns in the days after Christmas. Both River Island and New Look, for example, refused to accept returns on Boxing Day, but extended their usual return policies until January 31.

One logistics source said etailers are much more adept at handling high levels of returns now. 

“Returns are steadily creeping up,” he said. ”Two years ago the average would have been around 20%, a year ago it was about 22% and now it is more like 26%. Etailers like Asos.com are slicker at processing returns compared with the likes of Next and Marks & Spencer, which tend to be slower.”

The Retail Ombudsman, the independent consumer watchdog set up 2015, settled more than 25,000 disputes between stores and shoppers in its first year of operation. 

The largest proportion of complaints it received related to returns (30%), followed by deliveries (15%) and faulty goods (13%).

The service, led by chief ombudsman Dean Dunham, a former consumer rights lawyer, now expects a spike in the number of complaints about refunds following Christmas. 

Readers' comments (1)

  • The more you reduce items, the more returns you will get. If they weren't reduced, the then the customer wouldn't then return the item to rebuy cheaper....

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