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After Shopping And Shipping Crush Come Record Returns

STEVE INSKEEP, HOST:

January, the beginning of the year, is the traditional time for fresh starts and new resolutions and returning gifts you didn't want. It's peak season for online returns. In this story, NPR's Alina Selyukh introduces us to a word that's new to me - returnsmageddon (ph).

ALINA SELYUKH, BYLINE: The end of the year - you'd think it would be the time when stores and retail companies could finally exhale from the crush of holiday shopping. But for many, it's just the beginning.

MARCUS SHEN: This is the calm before the storm from our perspective.

SELYUKH: Marcus Shen is chief operating officer at B-stock, which helps stores resell their returns. And January is when the big wave of those returns comes crashing in, right after the big wave of shopping. Shen says returns in the first place give people confidence to buy stuff online sight unseen.

SHEN: Returns really are highly correlated to sales.

SELYUKH: But then the more stuff we buy, the more of it is likely to get sent back. And this holiday season saw record-setting sales, causing the 2020 shipmageddon (ph), overwhelming postal and delivery services. And so what comes next is a record-setting volume of returns, which Twitter mavens of retail have been trying to call returnsmageddon.

SHEN: Doesn't really roll off the tongue, right? We're all just trying to figure out a nice way to talk about this stuff.

SELYUKH: Whatever you call it, the phenomenon is real. This year, surveys are finding the majority of shoppers planning to return at least some of their holiday gifts. Narvar, which handles shipping and returns for hundreds of brands, predicts twice as many returns this year compared to last. Here's CEO Amit Sharma.

AMIT SHARMA: And our estimate, just in the shipping cost for retailers to get those items back, is going to be over a billion dollars.

SELYUKH: Over a billion dollars. Sharma says a few trends feed into the surge of returns, and the first is pretty straightforward. During the pandemic, more shoppers are buying online instead of in stores. And things we buy without seeing or touching, they get returned much more frequently.

SHARMA: In general is four to five times higher returns in online channel versus in store channel, especially in the apparel and footwear.

SELYUKH: Clothes and shoes, he says 30% to 40% of them might get returned. And there's one thing in particular that online shoppers have been doing a lot, especially during the pandemic.

SHARMA: Buy the same item, either in different size or in different color or style, with an intention of keeping one and returning the other items.

SELYUKH: This is expensive for retailers, who call it wardrobing or bracketing, though my favorite analogy came from Kary Zate at warehouse robotics company Locus, who says it's modern-day Goldilocks.

KARY ZATE: I call the three bears concept. They're ordering a size up and a size down. They find the one that's just right. And the other two items then are returned.

SELYUKH: This has been going on for as long as online stores allowed free or relatively cheap returns. But this year, in a pandemic with fewer opportunities to check things out in person, even more shoppers discovered this option. Also more people have been trying new stores, which means shopping at places they'd never visited before, unsure of sizing and quality. And finally, Sharma from Narvar says their survey found one more reason - pandemic weight changes.

SHARMA: Almost 40% of customers have mentioned that their sizes have changed during COVID time, and hence they are buying multiple items, making sure they fit.

SELYUKH: A very 2020 excuse for shopping like Goldilocks.

Alina Selyukh, NPR News.

(SOUNDBITE OF LAURIE JOHNSON'S "SHOPPING SPREE") Transcript provided by NPR, Copyright NPR.