KEY POINTS

  • Millions of returned holiday gifts await logistics majors including UPS
  • January 2 has been called 'National Returns Day' by delivery providers
  • Many retailers are offering a liberal return policies

A big challenge of handling millions of returned holiday gifts awaits many logistics majors including UPS. They are now calling the first workday of the New Year, January 2 as “National Returns Day.”

According to the forecast by UPS, more shoppers are expected to return merchandise than ever in the aftermath of the holiday season, including a record 1.9 million packages Thursday. This would be a 26 percent jump over the last year, CNN reported.

This figure excludes the volumes that U.S. Postal Service or shipping competitors like FedEx will handle. Return rates are generally higher with online shoppers than customers at traditional stores. In the case of holiday shopping, returns register a further uptick. 

January 2 as National Returns Day

The reason for UPS and other service companies dubbing January 2 as “National Returns Day” is the crazy amounts of packages they have to handle at the start of the year. 

The record holiday shopping in 2019 has also upped rates of returns. Retail sales in the U.S. jumped 3.4 percent between November and Christmas Eve, compared to a year ago, per MasterCard data. The buoyancy in holiday sales is attributed to the strong U.S labor market and a strong economy.

While online sales surged 18.8 percent, in-store sales piked up only 1.2 percent.

According to UPS, it may handle more than 1 million returns per day. The big spike in returns is a reflection of customer behavior as online buyers will return more products if they do not like it. There is a 20 percent return rate among e-commerce users. The merchandise return rate surges further to 30 percent during online holiday shopping.

Brick-and-mortar retailers have a return rate of 10 percent in the store, per Shopify.

Amazon’s free return policy

The online retail giant Amazon has expanded its free return policy during the holiday shopping season by adding many new items to the list. 

Under the new policy, Amazon will allow shoppers to return millions of items they bought from Amazon for free. The items include electronics, kitchen appliances, and household items under 50 pounds.

Amazon permits returns of purchases made between November 1 and December 31 until January 31, 2020. Earlier free returns at Amazon covered only shoes, bedding, and apparel. 

Shoppers carry televisions purchased from a store during Black Friday sales in Los Angeles Shoppers carry televisions purchased from a store during Black Friday sales in Los Angeles Photo: AFP / Mark RALSTON

Liberal retailers

Meanwhile, a study showed a whopping 77 percent of consumers think they have to return gifts bought during holidays this year. The study was done by commerce resource Oracle Retail.  

The report highlighted the return policies of several popular retailers and showed some retail brands offering an easier return policy. Many retailers have set no time limit for accepting the returned gifts.

Retailers not insisting on time limits for returns include Costco, Bath & Body Works, J.C. Penney, Joann Fabric and Craft Stores, MAC Cosmetics, Nordstrom, and Staples.