LAKELAND, Fla., Jan. 31, 2019 /PRNewswire/ -- Retail trends may come and go, but returns are here to stay. At least that's what the figures from the National Retail Federation suggest.
According to the group's year-end projections, American consumers were on pace to return nearly $400 billion worth of purchases in 2018—an increase of more than $100 billion over 2016 and an amount representing about 10 percent of total retail sales. This year? The total is expected to continue to swell.
While billions of dollars in lost sales is bad enough, it's just part of the real costs of returns. You also have to add in the losses that accrue when retailers are forced to clearance or distress out returned goods, netting just pennies on the dollar. Then there's the expense of fraudulent returns involving stolen or used merchandise. In addition, retailers spend an average of 8.1 percent of total sales managing reverse logistics, which includes activities like handling, processing, sorting, and disposition or reuse of all those unwanted or damaged items.
It's a big, backwards business, affecting cash flow, profits, and margins. And it's nothing new.
The Lure of Free Returns
Retailers and manufacturers have always had to deal with some returns, but never anything approaching today's volume. Conditioned by companies like Amazon to expect ever more lenient return policies, consumers are returning purchases at an unprecedented rate.
Consider this: while brick-and-mortar stores took back between 8 and 10 percent of all merchandise sold in 2018, the total for e-commerce retailers was more than twice that. In fact, online returns have been more than 25 percent each of the last five years. Although return policies drive decision-making for most shoppers, the importance of liberal returns is amplified among online buyers: 67 percent click on the returns page before making a purchase, 95 percent said they come back to online stores where the return process is easy and convenient, and 46 percent will abandon their virtual shopping cart…
To view the full white paper from TriFactor, please visit http://www.trifactor.com/Reverse-Logistics
TriFactor is a material handling systems integrator that specializes in the design and implementation of conveyor systems, storage systems, order picking, packing, and shipping systems for warehouses and distribution centers. For more information about TriFactor please visit www.trifactor.com or call us toll-free at 1-888-247-2417.