Rise in returns puts pressure on e-commerce merchants
Returns have nearly doubled since the start of the pandemic and the number of returns tripled year-on-year on December 26th compared to an average day in the US
A near 100% jump in the average age of returns since the start of the pandemic can be seen in new data from Returnly. Their data shows a consistent shift in consumer return patterns from the beginning of the pandemic and means that pressures on retailers are set to increase due to the already complex and costly burden of processing returns.
Starting in mid-March, the average age of returns (the time between placing an order and return creation) has climbed week after week, and peaked at 20 days in early August.
On top of this, due to the extra-long return windows, fewer back-to-the-office routines and more people looking to avoid crowds, retailers should brace for an even larger gap and a longer return season. In January 2019, it took shoppers close to seven days to mail returns, but it is expected to be far longer this year.
This will only be increased by the problems faced by USPS through the pandemic and peak season. Following USPS’ price increase announcements in August and October, a 7% drop in USPS market share can be seen, as e-commerce merchants move to competitive alternatives. This shift is also likely due in part to increasing concern around holiday delivery times to guarantee the fast-shipping experience that customers have come to expect.
“With record-breaking holiday sales, there is going to be a huge backlog of returns. This leads to unpredictability and longer refund times for consumers, which can quickly erode the trust they established with a brand," said Returnly founder and CEO, Eduardo Vilar.
The study also showed how direct-to-consumer brands began to offer higher discounts than ever before through the COVID-19 pandemic, and the study saw the dollar volume of discounts given by merchants to incentivize sales grow 180% year on year in April 2020.