This website collects cookies to deliver better user experience. Cookie Policy
Accept
Sign In
The Wall Street Publication
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Reading: Retailers’ Many Unhappy Returns
Share
The Wall Street PublicationThe Wall Street Publication
Font ResizerAa
Search
  • Home
  • Trending
  • U.S
  • World
  • Politics
  • Business
    • Business
    • Economy
    • Real Estate
    • Markets
    • Personal Finance
  • Tech
  • Lifestyle
    • Lifestyle
    • Style
    • Arts
  • Health
  • Sports
  • Entertainment
Have an existing account? Sign In
Follow US
© 2024 The Wall Street Publication. All Rights Reserved.
The Wall Street Publication > Blog > Markets > Retailers’ Many Unhappy Returns
Markets

Retailers’ Many Unhappy Returns

Editorial Board Published January 5, 2022
Share
Retailers’ Many Unhappy Returns
SHARE

As the holiday glow wears off and consumers return to their normal routines, they will start sobering up to the reality of those ill-fitting pants bought hastily at a holiday sale or that gifted necklace they will probably never wear. They won’t be the only ones who are disappointed: Longer return windows and higher parcel costs mean returns could end up taking a bigger bite out of retailers this year.

Products and gifts valued at $112 billion to $114 billion could be returned to U.S. retailers after the holiday season, up from $100 billion in 2020 and $95 billion in 2019, according to an estimate from B-Stock Solutions, an online liquidation platform that allows retailers such as Best Buy and Walmart to sell returned or excess inventory to other, typically smaller retailers. United Parcel Service expects to handle more than 60 million return packages from Nov. 14 through Jan. 22, a 10% increase from the previous year.

The percentage of merchandise returned has edged higher during the Covid-19 pandemic, in large part because online sales have return rates that are two to three times higher than sales at bricks-and-mortar stores, according to Pete Madden, a director in the retail practice at consulting firm AlixPartners. Roughly 18% of online sales are returned, according to a 2020 survey conducted by the National Retail Federation and Appriss Retail. The same survey found that 11% of total retail sales were returned in 2020, a bump from the 8.1% recorded in 2019.

Returns could come with a bigger hit on margins this year. Both FedEx and UPS said their rates would increase by an average of 5.9% across most services in 2022—the first time in eight years that either company has had annual increases above 4.9%. Higher wages mean it also will cost retailers more to process returns. For sellers of lower-margin or consumable goods, that will often mean shipped returns will cost more than letting consumers keep them. AlixPartners estimates that so-called returnless refunds could be worth as much as $4.4 billion for 2021.

Timing is another element that could erode returns-related margins. While retailers have traditionally offered longer return windows for the holidays than the standard 30 days, the pandemic has pushed more of them to stretch past historical norms. Walmart, Target, Macy’s and Bed Bath & Beyond are among those offering windows of 90 days, though each differ on which items qualify and whether that return window applies year-round. A winter sweater returned in March is worth much less than one returned in January, when a retailer might still be able to resell it without a steep discount.

The post-holiday surge in Covid-19 cases is something else to watch: Retailers might find it more difficult to persuade consumers to return items to stores instead of shipping them.

SHARE YOUR THOUGHTS

How many of your holiday gifts are you returning, and why? Join the conversation below.

As more retailers bank on online sales for growth, investors should keep an eye out for innovations that could cut down on returns altogether. Gap, for example, last year bought Drapr, which provides virtual fitting-room technology. Saks.com uses an algorithm that helps consumers find a size in a brand that is new for them by asking what size fits in a different brand, says Mr. Madden. A fast-growing industry of resellers—enabled by platforms such as Shopify, or even resale marketplaces such as Poshmark —is another area to watch. Their proliferation is good news if it allows retailers to command higher prices for their returned or excess inventory. Marcus Shen, chief operating officer of B-Stock, says that such resellers are thriving because consumers are “much more open and amenable to buying stuff that’s been opened or returned.”

In coming earnings seasons, retailers will likely boast about their healthy holiday sales volumes. Investors should also read the fine print on how the retailers plan to handle returns.

How will the pandemic affect America’s retailers? As states across the nation struggle to return to business, WSJ investigates the evolving retail landscape and how consumers might shop in a post-pandemic world.

Write to Jinjoo Lee at [email protected]

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the January 6, 2022, print edition as ‘Retailers Have Unhappy Returns.’

TAGGED:MarketsPAIDWall Street Publication
Share This Article
Twitter Email Copy Link Print
Previous Article Chinese Internet Stocks Tumble Again After Tencent Divestment Chinese Internet Stocks Tumble Again After Tencent Divestment
Next Article China’s Unpredictable, Heavy-Handed Governance Threatens Growth China’s Unpredictable, Heavy-Handed Governance Threatens Growth

Editor's Pick

New Council of Financial Advisors report finds tariffs not inflicting inflation

New Council of Financial Advisors report finds tariffs not inflicting inflation

Former Trump administration head of financial coverage Tomas Philipson discusses President Trump’s commerce talks with South Korea and Japan, present…

By Editorial Board 4 Min Read
Denise Richards’ Husband, Aaron Phypers, Recordsdata For Divorce
Denise Richards’ Husband, Aaron Phypers, Recordsdata For Divorce

Studying Time: 3 minutes Denise Richards could quickly be headed for divorce…

4 Min Read
NBA Summer time League takeaways: Warriors rookie Will Richard makes debut vs. Spurs
NBA Summer time League takeaways: Warriors rookie Will Richard makes debut vs. Spurs

Richard makes debut SAN FRANCISCO – The Warriors‘ acquisition of their three…

5 Min Read

Oponion

Horoscopes Might 17, 2025: Trent Reznor, put in your aggressive armor

Horoscopes Might 17, 2025: Trent Reznor, put in your aggressive armor

CELEBRITIES BORN ON THIS DAY: Nikki Reed, 37; Derek Hough,…

May 17, 2025

Teddi Mellencamp ‘Courting’ Thriller Man Amidst Most cancers Battle

Studying Time: 3 minutes Teddi Mellencamp…

June 4, 2025

GameStop Stock Jumps After Company Enters NFTs

A marketplace for nonfungible tokens and…

January 7, 2022

Bitcoin Firm NYDIG Raises $1 Billion From Investors

New York-based bitcoin firm NYDIG said…

December 14, 2021

After a dramatic Nov. 5 election, who will serve on the Oakland Metropolis Council in 2025?

OAKLAND — Town will likely be…

November 26, 2024

You Might Also Like

Copper costs hit document excessive after Trump declares 50% import tariff
Markets

Copper costs hit document excessive after Trump declares 50% import tariff

President Donald Trump introduced his administration will impose a 50% tariff on imported copper, marking a brand new ecalation in…

4 Min Read
Tesla shares slide after Musk declares new political transfer
Markets

Tesla shares slide after Musk declares new political transfer

FOX Enterprise’ Stuart Varney analyzes President Donald Trump and former DOGE head Elon Musk’s relationship after Musk’s public criticism of…

6 Min Read
Nvidia CEO sells M value of inventory as a part of deliberate sale
Markets

Nvidia CEO sells $15M value of inventory as a part of deliberate sale

Zor Capital Funding Advisory consultant Joe Fahmy discusses the technical indicators that predict inventory market momentum on Making Cash. Nvidia CEO Jensen…

3 Min Read
Ford recollects over 130,000 Lincoln Aviators because of threat of elements detaching whereas driving
Markets

Ford recollects over 130,000 Lincoln Aviators because of threat of elements detaching whereas driving

Ford is leveraging its dealership empire to revamp how company America helps charities. Ford Motor Firm is recalling greater than…

3 Min Read
The Wall Street Publication

About Us

The Wall Street Publication, a distinguished part of the Enspirers News Group, stands as a beacon of excellence in journalism. Committed to delivering unfiltered global news, we pride ourselves on our trusted coverage of Politics, Business, Technology, and more.

Company

  • About Us
  • Newsroom Policies & Standards
  • Diversity & Inclusion
  • Careers
  • Media & Community Relations
  • WP Creative Group
  • Accessibility Statement

Contact

  • Contact Us
  • Contact Customer Care
  • Advertise
  • Licensing & Syndication
  • Request a Correction
  • Contact the Newsroom
  • Send a News Tip
  • Report a Vulnerability

Term of Use

  • Digital Products Terms of Sale
  • Terms of Service
  • Privacy Policy
  • Cookie Settings
  • Submissions & Discussion Policy
  • RSS Terms of Service
  • Ad Choices

© 2024 The Wall Street Publication. All Rights Reserved.

Welcome Back!

Sign in to your account

Lost your password?