The 5 W’S of Holiday Returns

by
December 25, 2019

Across the country, brands and consumers alike are in the final stretch of prepping for the holidays. Come the afternoon of December 25, millions of Americans will be exhaling a big sigh of relief — and then stare at piles of returns and exchanges to be made. In fact, UPS estimates that it will handle more than one million return packages on January 2 — or “National Returns Day” — alone, a 26% increase from last year. 

Survey of Holiday Returns

To understand more about what brands can expect in the post-holiday returns rush, we surveyed more than 1,000 U.S. consumers, taking a look at the role of returns — from consideration to purchase and even the impact on long-term loyalty. 

The study confirmed that returns are on the rise — 86% of consumers have returned holiday gifts, and that more than half of consumers expect to return more this year than in years past. What’s more, Christmas returns policies heavily influenced holiday buying, with two out of three shoppers saying they considered a brand’s return policy when purchasing holiday gifts.

But we wanted to know more about holiday returns. What gifts are consumers returning most? Which gift giver’s purchases are falling flat? And how are returns making or breaking the customer experience? We dug into those questions to understand the 5 W’s of holiday returns — and what it means for today’s retailers.

1. Who?

Turns out, maybe Mom doesn’t always know best. Survey results showed gifts from Mom are the most likely to be returned, with 46% admitting to having returned her presents, compared to just 24% of consumers who have returned gifts from Dad. 

The survey also showed an interesting connection between relationship status and the likelihood of returning a significant other’s gift. While only 4% of consumers say they have returned a gift from a fiance, nearly 1 in 3 have returned a gift from their husband or wife. And with marriage comes in-law gifts, which women are 52% more likely to return than men. 

And good news for kids — only 9% of parents admit to returning gifts from their children.

2. What?

While the study showed no category is immune from returns, clothing was unsurprisingly the most frequently among holiday returns, followed by shoes, electronics, accessories, and toys.

Among the least frequently returned items? Furniture and — good news for Peloton — exercise equipment. In fact, only 29% of consumers said they would return a Peloton if gifted to them by their spouse, and men were actually 39% more likely to say they’d send the bike back. 

3. When?

Turns out shoppers are eager to clear their space of unwanted items. 67% of U.S. consumers say they make holiday gift returns within one week of the holiday, with 6% saying they handle returns the day after the holiday. 

But despite most consumers acting fast, they still expect brands to give them plenty of time to decide if they’ll be keeping an item, with shoppers saying they expect brands to provide an average returns window of 32 days. And 12% of consumers say they’ve kept an item they had no intention to use simply because they missed the returns window. 

4. Where?

While ecommerce is on the rise, the study highlighted the continued importance of omnichannel efforts, with 77% of consumers saying they still prefer to handle returns in stores vs by mail. That preference is likely driven by the desire for more instant gratification, as 71% of consumers cited that when making a return, their preferred outcome is a cash or credit refund, while 22% say they prefer to exchange the product for something else they like more.

5. Why?

The study showed consumers make Christmas returns for a myriad of reasons, with fit issues topping the list. Among the more interesting reasons, 27% of consumers say they’ve received a defective item, 22% say they received duplicates of the same gift, and nearly 10% say they have returned gifts in an effort to minimize clutter.

Equally as interesting is why consumers don’t return gifts that they’ve received:

  • 52% say returning the item wasn’t worth the hassle
  • 37% say they didn’t have the receipt
  • 15% say they didn’t want to pay for return shipping

Topping the list of reasons, however, is gift-keeping guilt. 79% of Americans say they have kept an item because they felt too guilty about returning it.

What This Means for Brands

One thing is clear — returns can make or break when it comes to winning and keeping customers.

In fact, 62% of consumers say they’ve decided not to purchase something because of a brand’s return policy — and 95% agree that a bad returns experience would make them less likely to purchase from a brand again in the future. 

But for brands who get it right, returns can also be key for upsell opportunities and driving long-term loyalty. According to the study, 46% of consumers have exchanged a gift for something more expensive, with men being 16% more likely to do so. 49% of consumers have also become a repeat customer of a brand after first learning about it when returning an item. When asked what drives repeat purchases following a return, shoppers cited fast and easy process (84%), free returns (67%) and having the return label included in the box (46%). 

In closing, shipping success isn’t a one-way street. From policy to holiday fulfillment, returns directly impact’s shopper purchase decisions, satisfaction, and long-term loyalty.

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