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Subsequent up for retailers: an enormous wave of presents is returning

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© Reuters. FILE PHOTO: A woman photographs the Christmas window in the Macy & # 39; s Herald Square store in New York City

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By Nivedita Balu, Melissa Fares and Lisa Baertlein

NEW YORK (Reuters) – As shoppers tuck their final Christmas presents under the tree, U.S. retailers prepare for a record-breaking spate of returns of online gifts purchased amid the deadly spike in coronavirus cases. To make the process more efficient, retailers like Walmart (NYSE 🙂 Inc and target Corp (NYSE 🙂 shoppers will drop unwanted gifts on FedEx (NYSE 🙂 or United Parcel Service (NYSE 🙂 drop-off points.

Others, including Best Buy, Dick & # 39; s Sporting Goods (NYSE :), and Nordstrom (NYSE :), are offering roadside returns for the first time as efforts to stop the spread of COVID-19 keep stores closed or numbers of approved customers have decreased.

Yields are expected to rise this year. Buyers looking to avoid contagion switched from stores to online – where response rates are historically higher. Retailers are also under pressure to make the process as seamless as possible for the customers they want to keep as long-term customers, as well as UPS and FedEx who are inundated with packages.

Even some malls are moving to make it easier for their tenants to return. Mall of America and Simon Property Group (NYSE 🙂 have partnered with Narvar, a returns management company, to avoid the need for buyers to print return labels for packages they drop off.

The National Retail Federation expects Christmas sales in 2020 to increase 5.2% year over year to $ 766.7 billion. About 13% of the goods, or around $ 101 billion worth of merchandise, sold during the 2020 holiday season will be returned, according to the trading group.

Optoro, which helps retailers sort, resell and dispose of returned goods, adds to the number even further. U.S. holiday yields are predicted to hit $ 115 billion in 2020 between Thanksgiving and late January. This is up 15% over the company's 2019 forecast, which UPS and home furnishings retailer IKEA are among its investors.

According to Rob Zomok, president of global operations at Inmar Intelligence, which processes around 600 million retail and e-commerce returns annually, the return rate for in-store apparel is 5% to 8%, while the online return rate is 30%.

"This math has resulted in a significant increase in returns," said Zomok, who added that returns on apparel are at record highs.

"If you are 100% shopping online, you are likely ordering a few extra items to return," said Sriram Sridhar, CEO of LateShipment.com, which helps customers track packages.

"We expect every retailer to generate around 50% more returns than in previous years during the holiday season," said Sridhar.

In addition, after products are returned, retailers quarantine or clean them to ensure they are virus-free.

"This is not the typical way returns are processed," said Paula Rosenblum, managing partner at retail research firm RSR Research. Kohls, who collects Amazon.com (NASDAQ 🙂 returns and sends them back in bulk to e-tailers, has extended its own premium electronics deadline.

It joins a number of retailers including Walmart, Macy & # 39; s, and Amazon, giving shoppers more time to return purchases – a move that could make reselling seasonal goods difficult. Inmar's Zomok says flipping these products over for resale is important – especially for fast fashion retailers selling trendy clothes.

"The window will be short," said Zomok.

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