Turning the Holiday Return Stress Into Ecommerce Success

If you think the holiday season is over for online stores, guess again. The adrenaline rush associated with Cyber Week has likely faded, sure, but there’s another beast to face in the new year: returns.

Perhaps someone ordered the wrong sweater size. Maybe it’s the incorrect shade of blue. Maybe the sweater itself just isn’t the giftee’s cup of wardrobe tea. Whatever the reasoning — and for whichever products — returns are forever an inevitable part of the business. 

In fact, total returns for the retail industry amounted to $743 billion in merchandise in 2023.

How an ecommerce company prepares for returns, however, can be the difference between stress and success, especially during the holidays.

Embrace the holiday return chaos

An increase in holiday sales comes with a larger chance of returns. U.S. shoppers were projected to return $173 billion worth of holiday purchases, a 28% increase from the previous year.

From potential size mishaps to bracketing — shoppers purchasing multiple variations of an item and expecting to return the ones that don’t work — this is the name of the game.

It’s important for business owners and online retailers to not get discouraged with holiday returns. That’s easier said than done, of course, but embracing the chaos can be enjoyable and help spark new, creative ideas to offer customers in the future.

The cost of returns

One of the biggest challenges for ecommerce returns is the cost, and it’s only getting higher.

According to Optoro, the cost of returns has increased 50% percent since 2018 and the cost to return a purchase averages 27% of the purchase price.

To combat costs — and other possible issues such as supply chain —  goTRG reports 59% of retailers adopted “keep it” policies for returns that aren’t “financially viable to ship back.” Additionally, more than 48% of retailers were encouraging BORIS (Buy Online, Return in Store) for the holiday season.

Needless to say, more and more retailers are prepared to eat some costs and let go of some merchandise to avoid the extra return expenses and increased inventory. 

Post-holiday sale magic

Have extra inventory because of returns? Don’t fret. Launch a post-holiday sale. This can help turn first-time shoppers into loyal customers or attract a new wave of business.

Sometimes a good deal can go a long way. Start the new year on the right foot with a sale and get some of the overstocked items out the door. 

If that is not an option for the business and the inventory needs to go, consider donating.

Updating return policies 

It’s no secret that returns can impact profits and retailers are starting to make changes to their return policies as a result. An Optoro survey found that 87% of retailers revised their return policies in 2023.

Some noted changes included return or restocking fees, drop-off locations, and an online returns portal.

While that does not account for every online store across the globe, that’s a significant number and updates should be considered annually.

The final word

The holiday return season can be tough. No matter the business size, all ecommerce stores are going through it.

If this return season is particularly stressful or challenging, perhaps it’s time to make some changes. Understanding return costs, updating return policies, and having a post-holiday sale can all help the online store improve and be better prepared for future holiday rushes.