Now that Christmas and Hanukkah are over, the U.S. has moved into the “returning gifts” phase of the holiday season. This year, Americans are expected to return hundreds of billions worth of merchandise.
A recent survey by Inmar Intelligence found that more than one-third of retailers expect the return rate this year to be between 11-20% and 16% of retailers are bracing for a return rate between 21-30%.
News Nation said some estimates put the dollar figure for returned gifts at around $170 billion.
The National Retail Federation’s holiday spending projections for the 2022 holiday season included a low-end estimate of $942.6 billion and a high-end estimate of $960.4 billion. These projections paired with Inmar’s survey findings indicate overall returns as low as $103.7 billion or as high as $288 billion.
Earlier this month, another survey from Phelps United found that 52% of its 600 respondents said they planned to return at least one gift they receive this holiday season. Some plan to return even more.
However, Phelps noted that those planning to return gifts may encounter challenges they haven’t experienced before.
“With inflation hitting a 40-year high this year and retailers concerned about rising costs narrowing margins, roughly 60% have said they are making changes to return policies, such as reducing return windows and adding shipping or restocking fees,” said the company.
According to Inmar, 44% of retailers are expected to offer free shipping for all returns.
Around 86% of shoppers surveyed by Phelps said they would buy at least three gifts from online merchants. Along with the prevalence of online shopping, a majority of consumers (62%) expect to return a gift because it is the wrong size or type. Additionally, 40% expect to return a gift because they already have one; 28% to exchange it for what they like more; 20% because expect not to like a gift at all; and 13% say it’s because they would rather exchange a gift for cash.
Clothing (71%) and shoes (53%) are what people expect to return most and gifts from parents (41%) are expected to be returned more than gifts from friends and neighbors (36%), a sibling (25%), an in-law (24%), a co-worker (23%), and their grandparents (17%).
Nearly 70% of consumers who plan to return their gifts said they expect to do so this week.
This summer, Inmar found that while the majority of consumers (68%) care about practicing sustainability in their everyday life, 55% “have little to no knowledge about what happens to the items they return to a retailer.”
More than 40% of respondents said they believed returns go back to stock to be resold.
“However, experts estimate retailers throw away about a quarter of their returns, and many more are resold through alternative channels rather than going back on store shelves,” said the company. “At Inmar, the largest retail returns processor in the U.S., 99% of returns processed go back into commerce, donation programs and energy-from-waste programs instead of landfills, a fact that escapes many consumers.”
Most consumers surveyed by Inmar (76%) said they would be more inclined to shop with a retailer that has more sustainable return practices if provided information about how their returns contribute to their carbon footprint.
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