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There's a Catch to the End of the Year Shopping Boom

January 08, 2014 2 min read

According to the Wall Street Journal, "As much as a third of all internet sales get returned.  And the tide of goods flowing back to retailers is rising. Shipper United Parcel Service Inc. expects returns to jump 15% this season from last year, making them a significant and growing cost for retailers. This is especially common now that both shipping and returns are often free." So all of those great sales that online retailers are promoting to ring in the New Year are mostly in an effort to draw in more customers in order to make up for that 33% of sales that will be returned.  Retailers are also trying to track customers that have less than ideal buying habits.  Chronic returners they are called.  The purpose of the tracking is to either discourage their purchase altogether or to get them to buy more when they are purchasing.  'Wardrobers' are also being tracked...those that wear items once and return them or try the clothes on at home without the intention of keeping them. While big box stores are raking in the revenue, smaller businesses are feeling the heat from trying to cover the costs of returns and exchanges, which most companies are paying for.  Online retailers are trying new tactics like suggesting sizes and redirecting discounts to help curb the rampant returns. Whereas brick and mortar stores are not responsible for the movement of returns and exchanges, online stores have no choice.  It is no wonder with livelihoods threatened that spending and returning habits are being tracked.  Fashion discounter Rue La La, owned by Kynetic LLC, is testing a program that gives customers access to their own purchasing history, and also access to sizing data across its customer base, to help them make better purchases the first time around.   For instance, a customer who has continuously bought the same brand of dress shirts in both a small and a medium might see a note pop up saying: "Are you sure you want to order the small? The last five times you ordered both sizes, you only kept the medium," Chief Executive Steve Davis said. You've got to admit...it would save time and money on both ends.

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