ParcelHero: returns are costing UK sellers around £60 billion a year.
‘Takeback Tuesday’ returns decreased by around 6% yesterday compared to last year, says ParcelHero. Despite the fall, around £1.41 billion worth of items are now heading back to retailers, which could prove the final straw for some hard-pressed sellers.
Post-Christmas returns for the first working day of the year were down by around 6% on the same day last year, says ParcelHero. Despite this dip, it says around £1.41 billion worth of items are now winging their way back to retailers. The home delivery expert cautions that the fall in returns is likely due to lower Christmas spending rather than a change in customer habits.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: “We’ve looked at our own returns volumes and spoken to people in the courier and retail industries and it looks like there was a small but distinct drop in the volume and value of returns on “Takeback Tuesday” yesterday, compared to record returns last year.
“Last year, around £1.5 billion of unwanted gifts and goods were returned in the first week after the Christmas and New Year break. This year, we’ve seen a slight dip in returns volumes and – looking at the types of items being returned – we’re estimating around £1.41 billion of clothing, electrical goods and toys are now winging their way back to retailers. The number of courier bookings for returned items peaked at 10am yesterday as people returned to the post-Christmas daily grind. The Royal Mail says Takeback Tuesday returns were up around 52% on a typical day last month and that certainly chimes with our own figures.
“We’d love to say that the slight drop in the number of Takeback Tuesday returns is because shoppers are becoming more aware of the environmental impact of returns and the financial strains they place on many much-loved, smaller, specialist retailers. However, it’s more likely the slight fall reflects what we suspect was a relatively lacklustre Christmas period for retailers, with online and in-store sales looking relatively flat. Fewer gifts equals fewer returns. Barclays says card transaction volumes on Black Friday 2023 were down -0.6% compared with 2022 and The Guardian reports that pre-Christmas “super weekend” sales fell by up to -32% online and -4.5% overall.
“Our recent industry report shows that returns are costing UK sellers around £60 billion a year. The study reveals a large chunk of these returns happen in the post-Christmas period. Around 47% of all ParcelHero shipments were marked as “returns” in the first week of last year.
“Online businesses face a no-win choice between reluctantly swallowing returns costs or risking negative online reviews from those customers with returns issues. 81% of stores say they are very concerned by increasing levels of customer returns. Smaller, specialist online retailers who thought they had enjoyed healthy Christmas sales are now facing plunging margins and warehouses filling with unsaleable stock as January returns come rolling back in.
“Customer expectations and the financial realities for smaller e-commerce sites are increasingly at odds. Some online retailers have told us that they deal with return rates as high as 60% after Christmas, with most being accepted unconditionally in order to maintain their all-important five-star ratings. These returns are being accepted despite the fact that online orders cost retailers £3 more to process than physical sales.
For more information on the full impact of returns on retailers large and small, read ParcelHero’s report: https://www.parcelhero.com/content/downloads/pdfs/returns/returnwhitepaper.pdf