Why Holiday Returns Could Be a Golden Opportunity for Retailers to Make New Sales

The holiday shopping season is in full swing, but the rise in returns is just around the corner. With UPS projecting that National Returns Day on Jan. 2, 2020, will see 1.9 million inbound packages, retailers must ensure that they have a smooth returns policy if they want to capitalize on customer traffic and profit from holiday returns.

A new study by marketing technology platform Valassis found that 77% of consumers are likely to purchase other items when returning or exchanging a purchase in-store. In-store returns were also the preference of 71% of consumers, although respondents aged 25-44 are more likely to ship a return. By ensuring that there is an in-store option for returns, retailers can improve the customer experience and increase the likelihood of additional sales.

When returning an item, 20% of consumers reported spending more on new items than the value of their returned item. With these new shopping opportunities in mind, 76% of respondents also reported looking for discounts and offers before they went to return their items. This suggests that the customer shopping journey does not end at the point of checkout, but actually can lead to a cycle of purchasing behavior.

“Retailers typically focus on the lead-up to major shopping events and on the initial sale, but there is a true benefit to continue connecting with consumers during this period of high returns,” said Carrie Parker, VP of marketing at Valassis. “Returns and exchanges provide opportunities to drive sales, as well as to engage and further build relationships.”

Retailers with a flexible and simple returns policy are more likely to see repeat customers; 94% of consumers said they would be more likely to buy from retailers offering a smooth returns experience. Important features included quick in-store returns (36%), an extended timeframe (20%) and free shipping for mailed returns (18%). An additional reported incentive was the use of a gift card, with 53% saying that they used a gift card for an add-on purchase when making a return.

“It’s clear that many consumers make additional purchases during this process — both online and offline,” said Parker. “Marketers can embrace this by incentivizing purchases and promoting products using intelligent targeting and even location-aware advertising to reach consumers when it matters most.”

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