returned products

$260 Billion of Returned Products Each Year in USA

There is obviously an increased demand for retail sales during the holiday shopping season. But the flip side of this increase is the increased returns.

The increase in digital shopping only means a larger record for online sales returns. That is why it’s common to see at least 30% of online purchases returned while clothing returns can reach at least 40%.

product returns

According to the National Retail Federation, Americans returned an average of $260 billion worth of merchandise last year, or at least 8 percent of all purchases. Because less than half of all the returned goods are re-sold at its original price, retailers can end up losing 10% of their sales, according to Gartner Research.

Any unwanted or damaged goods gets disposed or sent through several liquidators and wholesalers, leaving less for the retailers right before they can eventually sell the products to consumers looking for a lower rate.

“Retailers are not very good at managing returns right now, and so unless they invest in their ability to manage returns, the volume of returns coming back will cause problems in their overall supply chain” Tom Enright, supply chain research director at Gartner.

Third-party companies are profiting by solving eCommerce return problems

On the other hand, several third-party companies have identified an opportunity to earn by solving the retailers’ return problems. A Washington DC based startup company Optoro claim that its platform can be utilized for returned purchases by finding the best resale price once the item has been returned and scanned.

According to CNBC, at least sixteen of the top 20 U.S. manufacturers and retailers use Optoro’s platform to resell their items. Once it’s been tested and inspected, the refurbished item will then be simultaneously listed for resale on sites like Amazon, eBay, and Blinq.com.

Technology platforms such as Optoro offers a win-win situation for online resellers. Retailers can get a higher recovery rate for most returned goods, a loss can be reduced, and consumers can have another channel to shop for prices at a discounted price.

Do you have a high returns rate that you would like to reduce?  Let us know down below.

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