The return of the packages approaches.
United Parcel Service Inc. has pegged Jan. 5 as its peak day for e-commerce package returns, with an estimated 1.3 million parcels headed back to retailers and manufacturers on that Thursday, up about 30% from more than 1 million packages a year ago. During the first full week of January 2017, UPS says consumers will return more than 5.8 million packages, up about 16% from 5 million the same week of 2016.
During the 2015 holiday season, UPS says 45% of U.S. online shoppers returned a product bought online, and experts estimate returns of goods bought online range from 10% to 40% of holiday sales volume, depending on the merchandise category.
The 16% increase in returns volume for the first week in January is in line with the overall package volume growth UPS projected in October, when it forecast e-commerce deliveries between Thanksgiving (Nov. 24) and Dec. 31 would top 700 million, a 16.7% jump compared to about 600 million deliveries during the same period last year. UPS, which is the shipping carrier for 193 retailers in the Internet Retailer 2016 Top 500 Guide, said its U.S. average daily package volume increased 5.7% in the third quarter to 15.364 million packages from 14.540 million in Q3 2015.
Online retailers benefit when they make it as simple as possible for customers to return products because it increases loyalty and helps the retailer get products back in rotation, says Steve Osburn, director of retail and supply chain at retail consulting firm Kurt Salmon.
Many retailers maintain their standard return policies of 30, 60 or 90 days for online purchases, even during the holidays, but some are extending the window for purchases made in November and December.
Best Buy Co. Inc., No. 12 in the Top 500, offers an extended holiday returns policy. Customers who made purchases from Oct. 30-Dec. 31 have until Jan. 15 to return products (a few exclusions apply). The retailer’s typical return window is 15 days. My Best Buy Elite and Elite Plus members have an extended holiday return/exchange window, with Elite members having through Jan. 30 and Elite Plus members until Feb. 14.
Nike Inc. (No. 47) is accepting returns up to 60 days for online orders placed Nov. 1-Dec. 22; its typical return window is 30 days. Department store chains Kohl’s Corp. (No. 19) and J.C. Penney Co. Inc. (No. 33) accept general merchandise returns with a receipt with no set window, but this season both retailers emphasize on the returns section of their sites that the fastest and easiest way to return an online order is bringing it to a store. Kohl’s also has extended its 30-day return window for premium electronics. Such devices purchased Nov. 15-Dec. 25 may be returned by Jan. 31 with original packaging and a valid receipt or account information.
Ahead of its peak returns period, UPS led a $30 million funding round and announced an alliance with reverse logistics platform Optoro Inc., a returns and excess inventory vendor. Optoro’s software determines the best path for each returned item to a retailer or manufacturer, such as whether an item can be returned to inventory, needs to be repaired or should be donated or recycled, and it helps reduce environmental waste, the technology vendor says.
“Optoro is an excellent complement to UPS’s existing portfolio of retail services that optimize the flow of goods, information and funds,” said Alan Gershenhorn, UPS chief commercial officer.
Rival FedEx Corp., which is the shipping carrier for 144 retailers in the Top 500, in January acquired product return firm Genco, which handles hundreds of millions of e-commerce returns for retailers and brands, for $1.4 billion.
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