Online Returns Are Projected to Reach $37 Billion This Year — And They’re Peaking Before Christmas

Christmas is coming early this year — or at least it is for the companies that handle online returns.

UPS said on Wednesday that for the first time ever, the busiest day for online returns is coming before the December holidays rather than in early January. While the logistics giant still expects to see 1.3 million packages sent back to retailers on January 3 (the day it’s dubbed “National Returns Day” in the past), that number will be surpassed this year by a record 1.5 million returns on December 19.

Consumers today aren’t waiting until after New Year’s Eve, the carrier said, because they’re doing more self-gifting (a phenomenon the National Retail Federation said was up 13 percent over Thanksgiving weekend) and taking advantage of faster, easier shipping and returns policies.

In a new report, the commercial real estate brokerage CBRE estimates that U.S. online returns could ultimately total as much as $37 billion for the holiday season.

To reach this figure, the researchers applied the typical e-commerce return rate of between 15 to 30 percent, depending on the product category (items that need to be tried on for fit, such as apparel and footwear, tend to fall on the higher end of the scale) to eMarketer’s U.S. online sales forecast of $123 billion for November and December.

This would easily top last year’s estimate of $32 billion, proving that e-commerce is only becoming more entrenched in American shoppers’ routines in the lead-up to the holidays.

But while simplified free returns are a boon to consumers — who UPS expected to return more than a million packages per day throughout December — they can be costly to retailers that have to manage the reverse logistics process, whether by paying for their own warehousing space and personnel or shopping it out to a third-party logistics provider. Neither comes cheap.