The Christmas Return Rush Begins

Holiday shoppers 2014
Holiday shoppers inside Macy's in New York.
Getty Images.

The presents are unwrapped. The Christmas cookies eaten. The thank-you notes are in the mail.

Which means the Christmas-gift return rush has begun.

Returns generally increase for retailers after the holidays, but this year the rate is expected to surge thanks to a record online selling season and strong in-store sales.

“What I have seen is that [shoppers] are also waiting to get through the first week of January, though returns were coming in pretty heavy last Friday to coincide with promotions…the expectation is that returns are going to be up given that online retail is also up significantly,” said Laura Gurski, partner at consulting firm A.T. Kearney.

Gurski said she was expecting to see a return rate of about 15 percent for online purchases.

UPS expects to handle upwards of 4 million return packages by the end of the first week in January — up 15 percent compared with just two years ago — and said that 62 percent of its surveyed consumers said they had returned an online order in 2014.

Returns aren’t just a hassle for retailers — they’re costly, too. In 2013, at least a third of shoppers returned holiday purchases, leading to a loss of $60 billion in sales, according to the National Retail Federation.

Free returns are expensive and threaten to impact the season’s profitability. And fraudulent returns will cost retailers an expected $3.8 billion during the 2014 holidays, according to the National Retail Federation.

So stores are trying to get ahead of the return surge. Gurski said many retailers are adjusting their return policies to cover the ever-growing holiday selling season.

“[Retailers are having to go] back to items bought on Nov. 1,” she said. “And not just on Black Friday, because promotions start much earlier, especially online promotions.”

Many retailers are also aiming to nip returns in the bud with better online fit guides, and cut shipping losses by providing pre-printed shipping labels.