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From a financial perspective, every holiday season has its own twist – but two things are a given: retail yearly profits depend on solid holiday season sales, and consumers will be returning items after the holidays.

According to the National Retail Federation (NRF), U.S. holiday sales in 2020 totaled $761 billion, with $101 billion in merchandise, or 13.3% of those sales, returned. And, for 2021, the National Retail Federation has estimated that holiday retail sales will grow by another 8.5% to 10.5%.

By proactively managing returns with advance planning and strategizing, your organization can limit the financial impact returns have on your bottom line. What’s even more promising is that you can transform holiday returns into sales opportunities.

It’s time to be proactive about returns and recast them into a positive consumer experience and find incremental sales revenue to drive profitability.

Here are four ways to improve your holiday season revenue by proactively managing returns:

  1. Promote BORIS (buy-online-return-in-store). Giving consumers an incentive to return products to your store instead of using the “free” return shipping not only saves shipping costs, but it can also provide a better brand experience for shoppers as they browse new products and explore new collections within your brick-and-mortar store. Such experiences can increase brand loyalty and sales by demonstrating the ease of making a return and the joy of finding a special gift. With 92% of consumers stating that they will buy again if product returns are easy, this solution can make an impact.
  2. Encourage omnichannel returns. Consumers expect free shipping for online purchases and retailers have been advertising this to drive sales for years. However, the downside is return shipping costs which can add up quickly (avg. $10 per item each way), cutting deep into profits. Additionally, the carbon footprint from return shipping may undermine your sustainability efforts.

    As a finance leader, educating your organization about the true costs for “free return shipping” along with costs for restocking and loss can be instrumental in advocating for promoting in-store returns. By encouraging shoppers into the store to make their returns, new brand experiences are created that can inspire incremental purchases after the return which can recapture lost sales revenue and build loyalty.
  3. Implement a consistent return policy. Often there are inconsistencies between how returns are processed in-store vs. online. These can frustrate consumers and leave loopholes for bad actors to exploit. However, by managing all returns with the same policy, rules, and processes you can proactively reduce the financial risk of holiday returns, while better serving your shoppers.
  4. Deliver personalized messages and offers at the point of return. When a consumer returns an item, a retail associate can surprise them with a special message offering a discount on an additional purchase made in the store that day, or at a later date. This tactic can effectively show consumers that it is ok to make a return and that the retailer wants to help them find a product that will better serve their needs. Nearly 40% of the consumers who received incentives from a retailer using Appriss Retail’s solution have made a purchase after their return, and 9% will return to shop again within 30 days.

Planning Ahead for Holiday Returns

Finance leaders work to avoid year-end financial surprises that could include high return costs from shipping charges, restocking costs, write-offs and staff-overtime. Traditionally these have been viewed as a cost of doing business, yet with the significant growth of ecommerce sales and the resulting doubling of return rates, it’s time to change that thinking. It’s time to be proactive about returns and recast them into a positive consumer experience and find incremental sales revenue to drive profitability.

Why Rising Returns Could be Good for Your Business



Leslie Nienaber, Digital Marketing Manager, Appriss Retail 

Leslie researches business trends and distills the information for a retail audience. Her marketing experience has covered a wide variety of industries, including promotional products, microbiology, print, and mail. She spent five years in the retail industry before graduating with her Bachelors in Business Administration from John Carroll University.

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