Why More Holiday Sales Mean More Customer Returns

stack of women clothesAn increase in retail sales for this year will mean more merchandise returns, so U.S. retailers should start making contingency plans particularly for the upcoming holiday season.

The National Retail Federation (NRF) said sales would grow at least 4.5% for 2018, higher than the forecast range between 3.8% and 4.4%. Based on last year’s figures, the number of processed customer returns after the holidays may increase at the same time.

Post-Holiday Returns

A reverse logistics service from companies like ReverseLogix will be more relevant as retailers grapple on how to handle returned products more efficiently. The growing use of e-commerce primarily drove an increase in merchandise returns in previous years. In 2017’s holiday season, customer returns reached around $90 billion.

While most retailers want to avoid handling returns entirely, your business should have a strategic way of processing them for better customer satisfaction. Consumers are unlikely to patronize your products, whether you offer them online or offline, if your return policy involves complex procedures. You risk driving away customers especially the loyal ones if they experience a difficult time in returning unwanted items.

How It Leaves an Impression

NRF’s 2017 Holiday Shopping Behavior Survey showed that 80% of respondents found it easy to return products. However, almost 65% of them said that they wouldn’t buy again from a company after a challenging experience during the return process.

The poll only showed that lower prices and no shipping fees aren’t the sole indicators of bringing in new customers. It also revealed that a shopper’s single bad experience with a retailer’s return policy could have a lasting impact not only during the holiday season but for the rest of the year as well.

Higher retail sales bode well for business, although it’s necessary to review your strategies on handling returned products. As competition in the retail industry becomes tougher, customers aren’t willing to stick with just one company.