Prepare for the Next Seasonal Peak: Peak Returns

The results are in for the year’s busiest shopping weekend in the US. The Black Friday/Cyber Monday shopping period generated more than $41 billion in online sales this year—up from $38 billion in 2023. Over 197 million consumers shopped over the holiday weekend, second only to 2023, with Black Friday retaining its position as the busiest shopping day. 

While Black Friday/Cyber Monday drove significant consumer demand again this year, retailers must still cater to high customer expectations through the end of the holiday season. And this year’s holiday season is shorter than usual. Some retailers warn of volatility in the shortened timeframe between Black Friday/Cyber Monday and the new year. 

Here’s what consumers expect as the holiday season approaches its conclusion. 

Not only do retailers need to continue to meet high customer expectations through the end of holiday peaks, but they must also prepare for a different kind of peak right around the corner: peak returns.  

The holiday season triggers significant shopping activity, and that shopping activity translates to high return volumes. When it comes to returns, brands are increasingly forced to strike a balance between effective cost management and delivery great returns experiences for customers.  

Retailers face various returns challenges, from margin calculations to inventory management and operation workflows. Customers expect the process to be a seamless one—from refund through to returns drop-off or shipping. If the returns process creates friction for customers, they will notice and respond. According to Radial’s research, refund processing was the top consumer complaint. Packing items for return shipping was also a common issue, particularly for online apparel orders. Eighteen percent of consumers experienced issues with return packaging or labels and 16% struggled to find return instructions. 

Leading retailers can assess their full return process and determine ways to optimize, while still containing costs. That leads to a key question for many brands dealing with high returns: Should they leverage returns fees, or will that drive customers away? 

Brands waived or modified returns fees in the past to build customer loyalty and create repeat sales. Now, retailers are caught between managing the cost of returns via returns fees and risking customer relationships. Will returns fees cost retailers their customers’ loyalty?  

The short answer: It depends. Per Loop, a returns management partner of Radial, 70% of shoppers are willing to pay a fee for a hassle-free returns experience. A Radial Research survey showed 48% of consumers plan to avoid returns if there is an out-of-pocket cost, with another 43% are hesitant to pay returns fees but may consider it depending on the cost. Ultimately, retailers need to assess both their customers’ price sensitivity and how smooth of a returns process they provide to develop the right fee policies.

Here’s how retailers can prepare for peak returns after a record-breaking peak holiday shopping season. 

When possible, consumers want both online and in-store return options. That means retailers need to leverage omnichannel returns processes. For example, 70% of consumers prefer to use an online return portal when returning footwear or apparel, while 28% want to return apparel or footwear in stores. If retailers are not yet equipped to manage omnichannel returns in-house, third-party logistics providers can help develop end-to-end order management, with greater visibility into in-stock, purchased, and returned items to keep products and revenue flowing.  

Retailers should assess current fee policies in the context of their customers’ price sensitivity. Many customers may be happy to pay a fee for a hassle-free return, but that may vary by industry, product type, and other factors.  

Retailers can implement returns fees while also adjusting their returns management process holistically. Some retailers find success by offering free returns for orders over a certain value, or within a specific purchase period. Others offer free returns in-store or through a loyalty program. By focusing on a great returns experience, leveraging returns partners, emphasizing communication, and even adjusting fees based on relevant customer data, retailers can manage returns costs more effectively—and retain loyal customers. 

According to Radial’s research, 60% of consumers expect retailers to offer a traditional 30-day return window. The other 40% expect retailers to offer longer windows, with 28% expecting a 60-day return window and 12% expecting a 90-day return window. According to recent Loop data, brands can find success via a longer return window for exchanges and store credit and a shorter window for refunds. While inventory management can be a challenge with longer return windows, retailers may consider leveraging this approach to ensure return shoppers. 

Consumers expect easy refunds when making returns. While most brands write their return policies with a clear timeframe for refunds, returns experts recommend that even small businesses strive to process customer refunds within seven working days.  

But consumers still expect refunds beyond specific refund timeframes. Fifty-seven percent of consumers have tried to make a return outside of the specified return window—and they still expect a timely refund. Of those who tried to make a return after a retailer’s return timeframe, 62% expected a full refund or an equivalent store credit.  

Peak returns periods make it difficult to meet customer refund expectations. That’s why a third-party eCommerce fulfillment partner can help. For example, Radial’s team can help you streamline return processes to make sure customers get their refunds in a timely manner—and ensure products are ready for re-sale as soon as possible.  

According to Radial’s research, 50% of consumers feel that sustainability is important or very important in the returns process. This underscores the need for retailers to invest in sustainable packaging and shipping practices. Per a Q1 2024 Radial Research survey  found that:   

Brands can invest in sustainable, reusable packaging for both delivery and returns to meet customer expectations. 

Radial has helped leading retailers streamline returns management for more than 30 years. We have the technology, partners, and operational expertise to set up a returns program that is customized for each retailer’s business needs and makes the experience as easy as possible for customers. That includes omnichannel returns, payments and fraud, and more.  

Returns are inevitable—especially after peak shopping periods. We can reduce the costs and hassles associated with the eCommerce returns process and help you retain satisfied customers all year long.  

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