Online return costs in the U.S. rise 7% during peak season! Sellers choose to refund rather than return goods

It is learned that against the backdrop of rising inflation, labor shortages and epidemic prevention measures, the cost of return processing will increase during this year's peak season. At the same time, major retailers offer free returns to compete for sales, and the number of returns during the peak season will also increase accordingly.

According to the annual report recently released by CBRE-Optoro, the cost of returns during this peak season will increase by 7%, taking into account labor, transportation and warehousing costs, and the average return cost will account for as much as two-thirds of the original price of the goods.

The report shows that the return costs of electronic products such as computers, tablets and mobile devices are 15 times higher than those of clothing because workers must clear personal data. The Optoro founder pointed out that this cost is increasing as more goods are connected to the Internet of Things and need to clear data.

In addition to rising return costs, the volume of returns is also increasing.

The National Retail Federation estimates that online sales will grow 13% to more than $222 billion during November and December. CBRE's report predicts that $66.7 billion of online sales will be returned, also up 13% year-over-year and nearly 46% higher than the average of the previous five years. According to the CBRE report, about 30% of online sales will be returned, compared to only 10% of sales in physical stores.

CBRE estimates that for large retailers with growing e-commerce businesses such as Walmart, Target and Best Buy, logistics costs now account for 12% of sales, compared with just 6% for more traditional retailers.

CBRE also pointed out that early shopping due to concerns about the supply chain has also led to early returns, and returns can only be shipped in a dispersed manner, which further increases the cost of returns. In addition, the report said that the wages of logistics workers have increased by 5% during the epidemic, and retailers need to increase warehouse space by 20% to handle returns.

“As online retailers face profitability challenges amid soaring return costs and volume, we will see new models emerge where retailers incentivize buyers to keep items and offer refunds because profit margins can no longer be maintained,” CBRE said.

Editor ✎ Xiao Zhu/

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