We all know Christmas and the holiday season is big business for retailers, but the sheer enormity of the amount of money spent on gifts will blow you away. 

Not every gift fits, is loved, or even wanted by the recipient, so that means the retail supply chain is inundated with returns this time of year.  For the 2021 holiday shopping season, almost $120 billion worth of purchases will be sent back, with buyers looking for refunds or store credits. 

Data from the reverse logistics firm Optoro show that two out of three shoppers end up returning at least one gift they received. 

There are multiple reasons, so many returns have to be processed, and you can probably figure out one of the main reasons.  With so much online shopping taking place, the odds that something doesn’t fit properly or looks nothing like the image in your shopping cart are high. That’s a common occurrence for average shoppers. 

But there’s also a practice known as “bracketing” that takes place, where a customer buys an item in multiple colors and sizes, selects the one they prefer, then sends the rest back to the store they bought them from.  This is very common, especially when the retailer offers free shipping and returns.  For a shopper, it’s a low-risk proposition with a high likelihood one of the items they purchased works. 

The pandemic has forced even more shoppers than usual to shop online instead of making a trip to the mall. In November and December of 2021, online spending was up 8.5% from a year ago. 

Now, on to the info on the mind-numbing numbers of returns.  UPS alone said they plan on processing over 60 million returns from the middle of November until late January. 10% over last year. 

All these returns significantly impact the bottom line for individual retailers. Optoro estimates that it will cost a company 66% of the cost of a product to process a return when the costs for transpiration, processing, discounting, and liquidation is factored in. 

If you’re wondering why retailers continue to offer free returns and shipping, it’s because of the brand loyalty created for customers by doing that. 

No wonder Jeff Bezos decided to leave as CEO of Amazon to run around the world taking sexy selfies with his girlfriend Lauren Sanchez.  Who wants the stress of dealing with all those returns?

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