“Fewer gifts equals fewer returns” – post-Christmas returns fall slightly on last year

Korie Cull on Unsplash

By ParcelHero’s David Jinks M.I.L.T.

Post-Christmas returns for the first working day of the year were down by around 6 per cent on the same day last year, suggest ParcelHero figures and research. Yet despite this dip, around £1.41 billion worth of items are now winging their way back to retailers. Unfortunately, the fall in returns is likely due to lower Christmas spending rather than a change in customer habits.

We’ve looked at our own returns volumes and spoken to people in the courier and retail industries and it looks like there was a small but distinct drop in the volume and value of returns on “Takeback Tuesday”, compared to record returns last year.

In January 2023, around £1.5 billion worth of unwanted gifts and goods were returned in the first week after the Christmas and New Year break. This year the number of courier bookings for returned items peaked at 10am yesterday as people returned to the post-Christmas daily grind. The Royal Mail says Takeback Tuesday returns were up around 52 per cent on a typical day last month and that certainly chimes with our own figures.  

We’d love to say that the slight drop in the number of returns is because shoppers are becoming more aware of the environmental impact and financial strains they place on many much-loved, smaller, specialist retailers. However, it’s more likely the slight fall reflects what we suspect was a relatively lacklustre Christmas period for retailers, with online and in-store sales looking relatively flat. Fewer gifts equals fewer returns. Barclays says card transaction volumes on Black Friday 2023 were down -0.6 per cent compared with 2022 and The Guardian reports that pre-Christmas “super weekend” sales fell by up to -32 per cent online and -4.5 per cent overall.

ParcelHero‘s recent industry report shows that returns are costing UK sellers around £60 billion a year. The study reveals a large chunk of these returns happen in the post-Christmas period. Around 47 per cent of all ParcelHero shipments were marked as “returns” in the first week of last year.

Online businesses face a no-win choice between reluctantly swallowing returns costs or risking negative online reviews from those customers with returns issues. The majority of online retailers (81 per cent) say they are very concerned by increasing levels of customer returns. Smaller, specialist online retailers who thought they had enjoyed healthy Christmas sales are now facing plunging margins and warehouses filling with unsaleable stock as January returns come rolling back in. 

Customer expectations and the financial realities for smaller e-commerce sites are increasingly at odds. Some online retailers have told us that they deal with return rates as high as 60 per cent after Christmas, with most being accepted unconditionally in order to maintain their all-important five-star ratings. These returns are being accepted despite the fact that online orders cost retailers £3 more to process than physical sales.

For more information on the full impact of returns on retailers large and small, read ParcelHero’s Retailers Reach the Point of No Returns report here.