Even after Black Friday, Cyber Monday, Giving Tuesday, eBay’s Mobile Wednesday, Amazon Digital Day and, of course, Christmas, Hanukkah and New Year’s, there is yet one more day to “celebrate.”
National Returns Day.
Customers celebrate by trudging — possibly through snow, sleet, rain and hail — to return those unwanted items they pretended they liked at the time they received them. (Apparently, 73 percent of Americans fake their reaction — admit it, you were probably one of them.)
National Returns Day was created by UPS as the high water mark of returns. After the holiday confetti is cleaned up and people have recovered, they decide that there’s a lot of stuff that really needs to go back.
And that day this year was yesterday — January 5, 2017 — seven business days after Christmas. More than 1.3 million packages were shipped back to retailers on the day, with a total of 5.8 million slated to find their way back sometime this week. That’s up from 1 million packages on last year’s National Returns Day (Jan. 6, 2016) and a total of 5 million for that week.
All that shipping gets expensive — never mind the hassle and hustle for all parties. And it’s becoming more of a problem.
And in this eCommerce world, there is one company that is trying mitigate those issues through supply-and-demand aggregation: Happy Returns.
“I would say to retailers — the fact that we’re celebrating it as ‘a day’ is a testament to the fact that it is a real pain point for you and your customers,” said David Sobie, cofounder and CEO of Happy Returns, a technology, logistics and services company that enables in-person returns for online shoppers. “And in a way, celebrating it as a day takes attention away from the other 364 days in the year where returns are a problem. It’s not just that they’re a problem on Jan. 5, but they’re a problem 365/24/7.”
Happy Returns is a solution both from a consumer standpoint — to make the returns process better — and also from a retailer’s standpoint — to make returns more affordable. Thus, happier returns.
“The core insight that our business is founded on is that, given a choice, consumers prefer to return items in-store rather through the mail,” said Sobie. “And the limitations for companies that are online but don’t have a physical store is that they can’t serve that need and that preference that customers have for doing a return in-person, rather than via the mail.”
The company has brick-and-mortar Return Bars where customers can return in-person their unwanted items to retailers that subscribe to the company. Happy Returns — which is venture funded and now has seven Return Bars in San Francisco, Chicago, Washington, D.C., Houston and its headquarters city of Los Angeles — refunds the customer’s money and then aggregates those items with other customers’ returns in a box, shipping it back to the retailer. The model cuts down on costs of shipping and quite possibly frustrations and headaches all around.
“[Customers] prefer to hand their goods to someone and get their money back immediately. Rather than pack a box, secure and print the label, pack the good, tape up the package and wait three weeks in order to get their money back,” said Sobie.
And that’s just the customer side. Sobie said Happy Returns is also a salve for the pain retailers feel.
“If you look at the return rates for brick-and-mortar stores, it’s in the 5–10 percent range. It’s not uncommon [for online retailers] to have a return rate of 30–40 percent. That means one in every three items that you pack and ship out the door of your warehouse each day is something that you’re going to see again as a return,” said Sobie. “That’s money invested in shipping it back, handling it again and, in many cases, you’re getting inventory back that perhaps is seasonable or you’re not going to make much money on it to begin with.”
Anyone who’s shopped online, rather than in-store, can relate to the fact that, some or many times, the fit or style of a piece of clothing or shoe is a challenge. Customers compensate by buying more than one size of the same item or a few similar items and return the one that doesn’t work.
“Those are things that are really difficult in the online shopping space, and the impact of that is that online shopping creates a lot of returns,” said Sobie. “The fact that returns are growing is a function of the rise of eCommerce.”
Indeed, there are retailers that are banking on customers being lazy and not opting to return those unwanted items or within the exchange time allotted in the policy. That may be one strategy, but Sobie said those retailers have another thing coming.
“If you think about it, is that a good customer experience? No,” said Sobie. “If you’re banking on that to succeed in business, you’re not going to be around long.”
But as for UPS’ National Returns Day becoming another day in the chain of half-manufactured holiday season holidays, Sobie said, in a way, every day is National Returns Day.
“Whether or not we’re celebrating it as a day, it doesn’t matter. What matters is that it is a big problem that is getting worse,” said Sobie. “Happy Returns is a solution for retailers and a solution for consumers that makes this inevitable problem better.”