Major retailers are bracing themselves for a massive wave of returns as the "season of returns" gets underway after the Christmas holiday. The increase in online shopping that came as a result of the coronavirus pandemic has many experts predicting a likewise spike in returns.
The last week of December typically heralds in the "season of returns," where consumers flock to stores to exchange or return unwanted merchandise bought over the holiday season. This year, however, experts are predicting a considerable spike in the volume of returns due to online shopping, which leaves more room for mistakes due to consumers not being able to see a product in person. According to one survey, as many as 80% of consumers are set to return at least one gift this year.
To make matters worse for retailers, the "season of returns" may end up being prolonged due to slowdowns with the United States Postal Service, as well as FedEx (NYSE: FDX) and UPS (NYSE: UPS), which is causing some holiday gifts to arrive behind schedule. Those same slowdowns resulting from the spike in online shopping during the pandemic may also cause delays in mail-based returns, causing some returns to likely remain unfulfilled into next year.
Retailers are prepared, at least, and are adjusting policies and implementing new programs to address the needs of consumers. Passport to Wall Street previously detailed Walmart's (NYSE: WMT) new policies meant to address the influx. Amazon (NASDAQ: AMZN) has announced that customers may return items at certain Whole Foods stores without a box or label, and thanks to a deal with UPS, customers may also make free returns at UPS Stores. Target (NYSE: TGT) has instituted a similar policy, allowing customers to make free returns via UPS and FedEx stores. Some retailers, such as Dick's Sporting Goods (NYSE: DKS), are allowing customers to make returns via curbside pickup.