Supply chain · 8 January 2018

Christmas gift returns could cost retailers nearly £464m in January

3 Christmas presents wrapped in brown paper with ribbon
Easier gift returns procedures would make 58 per cent of consumers more likely to shop online

Failed Christmas deliveries may cost retailers as much as £464.9m this month, as gift returns are expected to continue to make life difficult for business owners throughout January.

Research from retail delivery firm Sorted has revealed that even after “Take Back Tuesday” on 2 January – when UK return volumes doubled that of a normal working day – gift returns cause by failed Christmas deliveries will still cost retailers hundreds of millions of pounds.

Polling more than 2,000 shoppers, the study warned that retailers’ profit margins risked being squeezed even further at a time when many will be implementing January discounting.

Researchers also uncovered a so-called “returns ripple” effect on shoppers in January, as 20 per cent of consumers who sent back one item because of late delivery also returned an entire “basket” of items.

Some 38 per cent of shoppers surveyed said that a difficult gift returns process would make them less likely to buy from a particular retailer again, whilst 58 per cent said they’d shop more online if there were simpler gift returns processes generally.

Commenting on the findings, Sorted founder David Grimes said that for retailers looking to minimise the risks posed by gift returns in 2018, innovating their online processes would be the key.

He added: “Looking ahead, retailers need to build even more innovation, such as social returns (returns via social media channels) or ‘from device’ collections based on geo-location, into the returns experience to keep ahead of the convenience curve and ensure that customer lifetime value and loyalty is retained.”

For consumers looking for more positive experiences in the gift returns process, a major consideration was also convenience.

Grimes said: “Our research shows that three quarters of shoppers already expect to be able to return an online order in any channel. Shoppers have become used to receiving fast and convenient fulfilment as standard.”

Delivery delays see online retailers lose out on £3.9bn in Christmas sales

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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