After a strong holiday season, many consumers are heading back to stores, this time looking to return their purchases.
According to a new report from Adobe Analytics, consumers spent $257.8 billion online from November 1 to December 31, an increase of 6.8% year over year and a new record for e-commerce.
But then, in the days just after Christmas, from Dec. 26 to Dec. 31, revenue increased 4.7% year over year. Adobe found that revenue increases in the first few weeks of January as well.
“The post-Christmas rally is pretty predictable,” said Vivek Pandya, principal analyst at Adobe Digital Insights. “It’s part of the whole experience.”
According to an October report from the National Retail Federation, returns are expected to reach 16% of all product sales by 2025, totaling $849.9 billion.
As online shopping has exploded since the pandemic, online return rates have become even higher, reaching 19%, NRF found.
For consumers, returns have become an important part of the shopping experience. In fact, an increasing proportion of shoppers are purchasing items they don’t intend to keep.
Nicole Pearl, 47, said she often orders clothes in multiple sizes to get the best fit for her children, ages 14, 12 and 8, especially when clothing is heavily discounted. “The Black Friday holiday season definitely has people shopping more and going home more than usual,” said Pearl, who lives in Chicago.
According to Optoro’s 2024 report, 56% of consumers buy items in multiple sizes or colors and return some of them, a practice known as “bracketing.”
According to Optoro, other shoppers go a step further, with 69% admitting to “wardrobeing,” or buying items for a specific event and then returning them.
Nearly half of shoppers say it’s acceptable to “bend the rules” when returning items, according to the NRF survey.
Shoppers pay attention to return policies
According to NRF, 82% of consumers now say free returns are an important consideration when shopping online, up from 76% a year ago.
According to NRF research, approximately 81% of shoppers check return policies before making a purchase, and 71% said a bad return experience would make them less likely to shop at a particular retailer again.
Lindsey Goffman, founder of return tracking app Refundly, said consumers are demanding more transparency around return windows, restocking fees and refunds. “It doesn’t have to be this black box,” she says.
“It’s very important for brands to continue to create ongoing value for consumers,” Adobe’s Pandya said. “Once you acquire these new consumers, you have to continue to maintain that relationship.”
But experts say practices such as braces and wardrobes pose major challenges for retailers, not only in terms of inventory management but also in lost revenue.
“This combination is turning revenue from back-office functions into a front-line profitability issue,” said Gaurav Saran, CEO of revenue management firm Reverse Logix.
To control the amount of inventory being returned, 72% of all merchants began charging restocking fees, restocking fees, or limiting return options last year, according to NRF.
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