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November 12, 2013

The Holiday Season Returns

How much money can you save by avoiding returns?

With the holiday season returning shortly, merchants are preparing for the increased number of merchandise returns that come with it.

John Frank of Internet Retailer, a great e-commerce publication, writes on this problem and how various merchants are trying to solve the issues arising from holiday returns.

In particular, he highlights how retailers try to quickly push returned inventory back into circulation, and employing services to make returns “easy and friction-free” for the consumer by allowing them to pick a gift they really wanted.

According to the “National Retail Federation Holiday Survival Kit” (download it here), returns can make up 20% to 40% of holiday sales volume, depending on the category of merchandise. With total holiday sales projected to reach $602.1 billion for 2013, gift returns represent a huge cost to retailers in terms of the logistics and manpower needed to satisfy customers.

I completely agree with John about the retailers’ pain on this front, and the extent of the problem. This is one of the key gift related concerns that retailers continuously surface to us. It is worthwhile to note that returns and exchanges are a year around occurrence with e-commerce, and returns are significantly higher when it is tied to gift related purchases.

The cost associated with these returns is significant for retailers, and interestingly enough, it is also one of the least pleasant outcomes for the consumers as well. The gift buyer feels like they have missed the opportunity to buy the perfect gift, and the recipient is now required to go through the hassle of returning it.

What if customers could return and exchange merchandise before it is shipped out to them?

The result, in addition to the buyers and recipients feeling great about the experience, is all those returned product losses and associated costs disappearing faster than Santa’s sleigh…

Friction-free gifting, our gift to retailers.

– Roy Erez, Co-Founder and CEO, Loop Commerce

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About Roy Erez

Roy Erez is the Co-Founder and CEO of Loop Commerce. An advocate for making e-commerce more thoughtful and focused on reshaping gifting together with an amazing team. Proud to be backed by industry leaders and grateful for his wife and kids for their love and support throughout this journey.

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