Returned televisions are being prepared to be resold.
The holiday season brings us comfort and joy, good cheer and buyer’s remorse.
People who rushed to snag discounts on TVs, toys and other gifts are quickly returning them for much-needed cash. The shopping season started out strong for stores, but it looks as if the spending binge has given way to a holiday hangover.
Return rates spiked when the Great Recession struck and have stayed high. For every dollar stores take in this holiday season, they’ll have to give back 9.9 cents in returns, up from 9.8 last year. In better economic times, it’s about 7 cents.
Fractions of a penny add up. Stores are expected to take in $453 billion this holiday season, and merchants make up to 40 percent of their yearly sales in November and December.
Returns are usually more associated with January than December. But these days, more is going back before it ever gets to Santa’s sack.
“When the bills come in and the money isn’t there, you have to return,” said Jennifer Kersten, 33, of Miami. She spent $300 on Black Friday on books, movies and clothing for her nephews. Last week, she returned half of it.
Some merchants are seeing few, if any, pre-holiday returns and don’t expect a surge afterward.
“We aren’t seeing a big problem with returns at all,” said Matt Brown, manager of Colorado Baggage Co. at the Denver Pavilions, who was helping out Wednesday at the Cherry Creek store.
But consumer electronics, in particular, are being returned at a rapid clip. Stores and manufacturers are expected to spend $17 billion repairing, restocking and reselling electronics this year, up 21 percent from four years ago.
At half of the 100 electronics manufacturers and stores surveyed by Accenture, a consulting firm, return rates have increased over the past three to five years. Most of the items are returned without flaws.
Several retailers declined to talk about returns. But if they need any evidence of growing remorse among their shoppers, all they have to do is look at the overstuffed aisles of liquidator warehouses.
Liquidation.com, which buys returned merchandise from big stores such as Walmart and auctions it to small businesses and dollar stores, says return rates are 12 percent to 15 percent, up 2 percentage points from last year and double the rate in better times.
Its four national warehouses are packed with thousands more smartphones, TVs and other holiday castaways than a year ago, said Bill Angrick, chief executive of the site’s parent company, Liquidity Services.
“This is going to be a record year for returns,” he said. “People are still reluctant to spend.”
Why they’re bringing things back
• Shoppers are bingeing on big discounts. Stores are desperate to get people in the door. But the same shoppers who find a “60 percent off” tag too good to resist may realize at home that they busted the budget.
• Stores have made it easier to take things back. Nordstrom is letting online shoppers return items at no extra charge this year. It used to charge $6. Other stores are offering more time to return or rolling out “no questions asked” policies — no tag or receipt required. But that can backfire. “Spurring more returns wasn’t part of the plan,” said Al Sambar, a retail strategist for consulting firm Kurt Salmon.
• Stores are undercutting one another in a tough economy. Wanda Vazquez spent $39.99 at a New York Target on iPad speakers for her 12-year-old daughter but returned them when she found something similar for $16.99 at Marshalls.
Via Denver Post