Each year, the return of items purchased over the holiday period usually peaks on a single day: National Returns Day, on January 2. This volume of reverse logistics can strain both fulfillment services and retailers, which can delay the processing and refunding of the goods. This year, UPS forecasts a shift from a single National Returns Day into National Returns Week – which will have repercussions for all involved.
While National Returns Day frequently reports the highest spike of returned packages in the year, UPS predicts that 2021 will see five days in a row of peak returns. For the week of Jan 4., the logistics company expects that 1.75 million packages will be received into the UPS system each day, amounting to 8.75 million and a volume increase of 23% compared to last year’s holiday season.
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“No matter how you look at it, returns are a growing and important part of e-commerce. In the last 10 years, returns have tripled and UPS has been leading the technology and logistics every step of the way,” said Kevin Warren, Chief Marketing Officer at UPS. “We take returns seriously at UPS because it’s serious business.”
Returns have been growing in importance for both consumer and retailer, as the number of shoppers purchasing online increases – and the ability to first test a product in-person diminishes. Footwear in particular is vulnerable to increased returns, due to the variance in sizing and fit across brands – and even within brands’ own collections. This leads many shoppers to practice “bracketing,” whereby they order multiple sizes with the intention of returning any that don’t fit.
Fortunately for retailers, e-commerce growth has changed the way many consumers feel about returns. Needing to return an item is less of an issue, but returns platform Optoro found that nearly 75% of shoppers said that the returns experience would impact whether they would return to a retailer or not. Features like free return shipping, contactless drop-off and instant refunds are growing in popularity.
“With the rise of e-commerce, returns are becoming a more consequential factor in a consumer’s decision about where to spend their dollars, and we’re seeing more consumers checking return policies and options before they even make a purchase,” said Tobin Moore, co-founder and CEO of Optoro.
For retailers, the unpredictable nature of reverse logistics can create difficulties on the back-end. Warehouses must be flexible enough to handle any volume of returns that arrives, while staff must be able to process and reintegrate the product into the supply chain with maximum efficiency. Millions of dollars a year are lost to returns and an overburdened system is more vulnerable to these losses than a well-oiled machine.
Therefore, the shift from a single peak returns day to a week of consistently record-hitting numbers could have considerable impact on operations. The longer length may require retailers to hire additional staff to handle the volume, or adjust their policies; it may no longer be realistic to promise an exchanged item to be shipped same-day, for instance.
At UPS, a number of protocols have been introduced recently to ease the returns process, even amid higher volumes. The launch of digital returns allows for shoppers to initiate their returns online and drop-off their items at one of 5,000 UPS Store locations. Some merchant partners will allow consumers to leave these items unpackaged for drop-off; UPS will consolidate the returns for improved efficiency and minimal packaging waste.
Retailers can also take advantage of services like UPS Returns Exchange, where a driver is sent to pick up a returns package with the exchanged item already on-hand; UPS Returns Plus, where the merchant sends a driver with the returns label to the customer’s address and takes the item with them; and UPS Printed Labels, which can be included in the original shipment and allow for free returns through UPS. Emailed labels are also available.