Shoppers Aren't Rushing to Return Gifts, Making Merchants Jolly
(Bloomberg) -- It looks like retailers won’t have to worry about a rush of returns, according to one analyst, even with a bump in online sales this holiday season.
So far, there hasn’t been a spike in merchandise coming back, said Joel Bines, co-head of retail consulting at AlixPartners. That’s likely because a lot of the online gains came from categories such as groceries and electronics that don’t see high return levels, he said. The results should assuage concerns that the faster online sales growth will lead to a similar uptick in returns.
That’s another reason for retailers to rejoice as holiday shopping winds down. Consumers came out to spend this year, and it didn’t even take last-minute promotions to lure them to stores and online -- meaning profit margins will probably be healthy. Craig Johnson of Customer Growth Partners has forecast a 5.5 percent sales increase for the two-month period to $671 billion, the most since 2005.
While returns can eat into margins, they do have some upside as well: When shoppers come in to exchange merchandise, get a refund or use gift cards, they tend to pick up some extra items as well -- often at full price.
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