UPS expects 1.9 million package returns in a single day - and it reveals a troubling reality for retailers about holiday shopping
- UPS said Monday that it's expecting a record-breaking surge in package returns this holiday season.
- Return activity is expected to peak on January 2 with 1.9 million package returns, which is up 26% from last year's peak, the company said.
- Overall, shoppers are expected to return about one million packages daily during the month of December.
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UPS is expecting a record-breaking surge in package returns this holiday season, signaling trouble ahead for retailers that bear the brunt of return costs.
UPS said Monday that it expects shoppers to return about one million packages daily during the month of December, and about 1.6 million returns daily during the week before Christmas.
Return activity is expected to peak on January 2, with an eye-watering 1.9 million package returns, UPS said. That's up 26% from last year's peak in package returns.
"As retailers start preparing for the busy holiday season, they should certainly be factoring returns into their business plans," UPS' chief marketing officer, Kevin Warren, said in a news release. "Gone are the days where returns were isolated to January - today's empowered consumers will be sending packages back to retailers all season long."
This is bad news for retailers, especially those that cover the costs of shipping and returns for shoppers.
Items returned through the mail cost retailers about twice as much as those returned to stores, according to an AlixPartners report. The returns process costs retailers $3 per package when items are returned to stores, or up to $6 per return when they are shipped to a distribution center, the report found.
Some retailers have started cracking down on excessive returns by tracking shoppers' return activity.
Business Insider reported last year that at least a dozen major retailers including Amazon, Best Buy, Home Depot and Victoria's Secret were discreetly tracking shoppers' returns and, in some cases, punishing people who were suspected of abusing return policies.
A National Retail Federation survey found that retailers expected about 11% of sales to be returned during the holiday season last year. A separate study by Appriss Retail estimated that returns cost retailers about $369 billion in lost sales last year, or about 10% of total sales.