Now comes the great deluge of unwanted gifts. After spending the entire year getting shoppers to buy as much as possible for the holidays, retailers will spend the next week or so taking back tens of billions of dollars’ worth of presents.
The returns counter may be the most unloved place in American retail, for shoppers and store owners alike. But retailers are learning to kick the supply chain into reverse gear, making it as easy to return that oversized sweater or awkward mittens from your mother-in-law as it was to get them to her.
Mindful that many shoppers who return gifts end up making additional purchases at the store, retailers have learned to “embrace and solve” this always unpleasant task, said Larisa Summers, a senior vice president at Optoro, which helps to manage returns for big retailers such as Target.
“Even as recently as five or 10 years ago, the retail industry was about prevention and avoidance of returns,” Summer said.
Walmart, for example, has a mobile app customers can use to begin the process before going to a store, and it has set up kiosks inside and express lanes at its customer service counters to complete the returns.
Amazon has new places where customers can return gifts that were ordered online: storefront lockers at markets in its Whole Foods grocery chain, and Kohl’s department stores, which will pack, ship, and return items for free.
Happy Returns, a startup in Santa Monica, Calif., that manages returns for online retailers, has set up “return bars” at the Burlington Mall, South Shore Plaza, and Northshore Mall. Shoppers get the convenience of a nearby drop-off location, while retailers in those malls get additional foot traffic, the company says.
About 30 percent of goods bought online are returned, according to the National Retail Federation, and many shoppers have no choice but to ship the items instead of going to a store. In its most recent annual survey of online shoppers, United Parcel Service found that an increasing number rate free shipping of returns as important when selecting an online retailer — with 79 percent saying it helped them seal the deal on their purchase.
“When a retailer is branding themselves to the customers, they’re developing an experience, and they’re selling on price,” said UPS spokesman Matthew O’Connor. “The returns experience is part of that.”
What many shoppers may not realize is that returned items often don’t end up back on store shelves.
“Five billion pounds of landfill waste is created every year in consumer returns,” said Summers, a returns specialist for the logistics company Optoro. This legacy of waste, she added, has long led to retail inefficiencies.
One service Optoro offers its retailers is to divert those returns from landfills by reselling the items on its speciality websites, BLINQ.com and BULQ.com.
Another major player in the industry, Indianapolis-based Liquidity Services, hosts massive warehouse sales of surplus items for its retailing clients.
And sometimes the least expensive way to manage returns is to avoid taking them in the first place.
Jet.com, the online competitor to Amazon that Walmart acquired, distinguishes itself, in part, by offering discounts if the shopper agrees not to return the item, said Elliot Rabinovich, a professor in supply chain management at the University of Arizona. Walmart has also adopted this approach to online sales, and both companies will charge a fee for those returns, to cover shipping and processing costs.
During returns season last January, the online retailer Zulily scored a major publicity boost when a customer service agent gave a shopper credit for returning a child’s coat, but told her not to bother sending it back.
“If you know someone who needs a winter coat, or if you would like to donate it to charity, that would make us very happy,” the Zulily representative told the woman, according to a Facebook post that got 70,000 “likes.”