UPS expects nearly 2 million package returns in a single day, and it reveals a dark truth about holiday shopping
- People are expected to return 1.9 million packages on January 2, the peak day for returns following the holiday season, UPS said on Thursday.
- That represents a 26% increase in returns over last year's National Returns Day, according to UPS.
- These returns are expected to cost retailers millions of dollars in lost sales.
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UPS is predicting a massive amount of returns on January 2, "National Returns Day."
People are expected to deposit 1.9 million packages into the UPS network on January 2, the peak day for returns of the year. The figure represents a 26% growth in returns from last year's National Returns Day.
The massive growth of returns made through UPS highlights the rise of e-commerce in recent years, as customers increasingly order and return gifts via UPS and other delivery services instead of at the mall or department stores.
"For retailers, a seamless returns process is essential to keeping and growing business," Kevin Warren, UPS chief marketing officer, said in a statement. "We proudly offer businesses of all sizes - from global players to small and medium-sized merchants - the sophisticated returns services that today's consumers demand."
The rise of returns 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," Business Insider's Hayley Peterson reported earlier this year. "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."
Online sales were up 18.8% this holiday shopping season, despite retailers having six fewer days to sell items between Thanksgiving and Christmas, according to a Mastercard report released Thursday. Overall retail sales were up 3.4% year-over-year in the same period, the report said.
Retailers expected about 11% of sales to be returned during the holiday season last year, according to a National Retail Federation survey. And, returns cost retailers an estimated $369 billion in lost sales in 2018, or about 10% in lost sales, according to a separate study by Appriss Retail.
With online sales and returns growing, some retailers are taking precautions to address customers abusing return policies. Business Insider reported last year that Amazon, Best Buy, Home Depot and Victoria's Secret are among the companies that discreetly track shoppers' returns and, in some cases, punish those suspected of abuse.