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UPS Expects Record-Breaking Holiday Returns

Is retail in for a record-breaking “returns season?”

UPS expects to handle more than 60 million holiday-related returns between Nov. 14 and Jan. 22—a 10 percent increase over the same period a year prior, the company said this week. The logistics provider’s research found that 27 percent of American shoppers plan to make a return during this period—and 41 percent consumers expect to return three or more items. Twenty-one made a return before Christmas.

Ballooning online sales are one factor behind surging holiday returns, ESW wrote in a report published Wednesday. The global direct-to-consumer e-commerce company survey of roughly 15,000 international shoppers found that consumers view the issue differently across generational and geographic lines.

More than half, or 56 percent, of Gen Z and millennial respondents, who make up 60 percent of cross-border e-commerce shoppers, said they were unlikely to ship back unwanted holiday items, citing the inconvenience, cost and environment impact.

“Eliminating the friction Gen Z and millennials associate with returns will be a big win for all direct-to-consumer brands, as these young adults will continue to drive the growth in e-commerce in all markets,” ESW president and CEO Patrick Bousquet-Chavanne said. More than 30 percent of Gen Z and 37 percent of millennial shoppers have made more than 11 cross-border purchases over the past year alone, he said. “Taking away the ‘work’ associated with returns will help attract more Gen Z and millennial shoppers,” he added.

Shoppers worldwide hold differing views on returns. Consumers in China (67 percent), India (64 percent) and UAE (64 percent) are most likely to avoid returning purchases, the report showed. Returns activity within the U.S. also varies by region, according to UPS, with the Northeast seeing the highest rate of send-backs (30 percent), followed closely by the South (29 percent) and the Midwest (27 percent). Shoppers in Western states return fewer packages than all others (21 percent).

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Consumers across the board tend to hold onto goods they don’t want due to unclear return policies, a lack of local collection points, and the cost of their item simply not being worth the trouble, ESW said. UPS research indicated that 43 percent of American adults describe a lack of convenient drop-off locations or strict pickup requirements as their biggest pain points.

Meanwhile, shoppers of all ages are divided about their role in promoting sustainability. UPS data saw 35 percent saying they would be willing to pay more to return an item by mail if they knew that the process was more sustainable—but 84 percent still expect online retailers to offer a no-cost return option. The majority (79 percent) of consumers said that a positive returns experience would influence their decision about future purchases from a brand, but 35 percent currently view returns as a “frustrating experience.”

UPS claims its tools and services facilitate easy returns. Consumers can use its digital returns process to drop off their unwanted goods free of boxes or labels at a UPS store. The provider’s UPS Returns Plus program enables a UPS driver to collect the return shipment from a consumer’s doorstep, bringing a pre-printed return label with them. Merchants can also include return labels with shipments, or email them to shoppers on request.

“Free returns, scheduled pick-ups, and easy-to-access collection points will help mitigate burdensome returns requirements,” ESW’s Bousquet-Chavanne said. The company facilitates pre-paid, drop-anywhere, or pick-up returns for its merchants, and operated 68 returns shipping centers across the globe.

“Brands that transparently communicate their sustainable shipping options for both deliveries and returns will likely create a more loyal customer base across all generations,” he added.