UPS to handle record 60M returns during peak shipping season

Online holiday sales are slated to jump YoY, and so are returns.

“I think that this is a trend that we’ve seen over several years, that returns have increased,” Mayer said. “Last year, it was about 55 million (returns). We looked at the trendlines, made the forecasts and we were looking at 60 million or more than 60 million this year.”

As returns activity has increased, reverse logistics have become a vital part of the retail playbook to build customer loyalty. According to UPS, 79% of customers say a positive returns experience influences their decision to make future purchases, and 84% expect online retailers to offer a free return option. Mayer said those findings came from UPS market research.

But costs associated with returns are climbing in a pricey supply chain environment. Optoro, a returns processor, estimates a $50 returned item will cost an average of $33 to process this year, up 59% from 2020.

Retailers can offset the costs of returns in other areas of their operations, said Nikki Baird, VP of retail innovation at Aptos, in an email. This could include offering promotions for bundled items that are more cost-effective to deliver or encouraging customers to return online orders at brick-and-mortar locations. They could also push to mitigate the need for returns in the first place.

“Retailers need to invest in fit technology and pay close attention to things they do that drive returns,” Baird said. “Reducing returns can pay off even more than trying to adjust pricing to capture higher shipping costs. If you can get customers to keep what they buy, then there’s no shipping costs to bear for returns.”

Post time: Jan-11-2022