While Christmas tills may have been ringing with festive spending, the next few weeks could still spell many unhappy returns for retailers, Vicky Brock, CEO of Clear Returns, a retail returns specialist, warns:
“With consumers increasingly buying first and choosing later, returns will become a significant pain point for retailers in the period following Christmas, as unwanted Christmas gifts are sent back. Our data shows that up to 10 per cent of all refunds for the year will hit UK retailers between Boxing Day and late January.”
“We estimate that the busiest in-store returning day when the volume of refunds will be the highest is Monday 28th December, as shoppers take advantage of the extra Bank Holiday, whereas eCommerce items which are sent back are likely to peak on the 30th December. These are then unlikely to be processed until the New Year, resulting in a cash-flow hell for retailers which could cause them to enter negative trading once corporation tax and rents are due.”
“This Christmas we have seen an unprecedented level of discounting with retailers extending their promotions over much longer periods – and the same can be seen for Boxing Day, with many retailers starting offers earlier this year. For example, Superdrug is starts its Boxing Day sale online today (23 December), with discounts instore from 26th December.”
“This is causing ‘hedge spending’ behaviours amongst consumers, whereby shoppers buy an item at full price and then wait to see if it features in the Boxing Day sales. They then buy the reduced product and return the full priced item – meaning a triple hit for retailers: not only do they lose margin on the sale item, they foot the bill for the cost of the return and, by the time the refunded item is processed, it re-enters the store at a marked down price, causing further loss of profits.”
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