Online Retailers Face Unprecedented Surge in Returns Post-Holiday Season

E-commerce businesses are currently facing an unprecedented surge in product returns after the holiday season, as reported by leading returns management company ZigZag. Notably, these return rates have significantly increased compared to last year, despite the growing trend of shoppers incurring return costs.

ZigZag, which joined forces with Global Blue three years ago, has gathered these insights from its extensive user data across its platform. Based in the UK, the company observed that, in this region, the volume of returned products from December 24 to January 2 was 16% higher than the previous year. In the US, this increase was even more pronounced, with a 26% rise compared to the same period a year earlier.

The Peak

The most substantial influx of returns was noted on January 1 and 2, with UK online retailers receiving 42% more than at the start of 2023. Al Gerrie, CEO of ZigZag, suggests that this trend aligns with the current economic landscape, where consumers are increasingly conscious of their spending.

In these first few days of the year, British sellers experienced a 42% increase compared to the previous year.

Gerrie remarked, “Though we don’t anticipate this 42% increase to persist throughout January, the data indicates that this could be one of the busiest Januarys on record for returns. This may be due to shoppers returning holiday gifts and purchases, possibly aiming to rebuy them at lower prices during the January sales. This creates a complex scenario that retailers must adeptly manage.”

The Trend

Interestingly, almost half (48%) of all returns processed by ZigZag during the Christmas season were paid returns, a significant increase from last year. This trend was also evident in Germany and France, where paid returns grew by 13 and 20 percentage points, respectively.

Nearly half (48%) of the Christmas returns were paid by the customers.

Furthermore, 63% of ZigZag’s retail clients have now implemented some form of paid returns policy. This shift indicates that charging for returning items is becoming a more standard practise. Although online retailers would prefer to minimise returned items due to the high handling costs, which often exceed customer contributions, charging customers to return products is becoming a strategy to discourage unnecessary returns and reduce operational burdens.