Retail experts: E-commerce to face hit from holiday refunds

Retail Experts: E-commerce to face hit from online refunds

Retails experts say shoppers are expected to return twice as many items they did during last year's holiday period, a hit to companies who depended on e-commerce during the pandemic. Candese Charles reports

Holiday returns, although not wanted, are common the day after Christmas but this year could be a rough one for many retailers.

While retail experts report a surge in online holiday shopping, they say the holiday gift to businesses comes at a price.

Retails experts suggest that's because shoppers spent their money online this year, triggering what retail management professor, Kirthi Kalyanam, calls "Return-ageddon.

"It’s this huge never before seen amount of returns that are going to happen no doubt about that," said Dr. Kalyanam, Santa Clara University.

MORE: Small businesses with low online presence left behind in holiday buying boom

According to the National Retail Federation, last year e-commerce accounted for 20 percent of the holiday sales. But during the pandemic, that number vastly increased, with shoppers buying a record number of items online that they have not seen in person. This leads to more returns.

San Mateo-based research company Navar Inc., said shoppers are expected to return twice as many items as they did during last year's holiday period.

"Now somebody is paying for that. Shipping to my house and the shipping back. So this is not good for a retailer," said Dr. Kalyanam.

It could cost companies roughly 1.1 Billion dollars.

But the cost could come with some learning lessons.

"Retailers are going to learn a lot about how to manage the return process better," said Dr. Kalyanam, "and hopefully retailers are going to be better off at this next year."

Due to current shipping constraints, buyers could be waiting two weeks or more for refunds.

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