Episode 17
The High Cost of Post Christmas Returns for Retailers
Christmas might be over, but for retailers the hard part is only just beginning.
Hi, I'm Clare Bailey, founder of Retail Champion.
In this episode of Retail Reckoning, I’m talking about the real cost of post-Christmas returns and why January can feel like a hangover no one warned you about. From gift receipts and goodwill returns to consumer rights and reverse logistics, I break down what shoppers are entitled to, where retailers often get caught out, and why poorly handled returns can quietly damage your brand.
We look at why the “Great Christmas Returns Rush” has become a new festive tradition, how sales and price drops fuel cynical returns, and what retailers can do to protect margins without turning the returns desk into a battleground.
Whether you’re a retailer bracing yourself for January or a consumer trying to work out what you’re actually entitled to, this episode will help you understand the rules, the realities, and the emotional toll of the post-Christmas remix.
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Transcript
Well, whether you're into re gifting or the Great
Speaker:Christmas Returns rush, certainly this is something that
Speaker:affects retailers and consumers alike. Are you one of the people
Speaker:that want to take your Christmas presents back, give a happy smile when you
Speaker:receive them and then hope that there's a gift receipt inside? You're
Speaker:not alone.
Speaker:Welcome to retail reckoning. It's the 22nd of December and
Speaker:if you're anything like me, you're anticipating more returns in progress
Speaker:notifications than festive lights in the coming week. That's because
Speaker:we're going to be deep into what I call the Great Christmas returns rush.
Speaker:It's getting messy, cynical and a lot more ruthless.
Speaker:So why is the returns rush so big right now? Well,
Speaker:I've done a bit of research. Yeah. Retail
Speaker:reckoning. Retail reckoning.
Speaker:No space for dusty shelves. Cause
Speaker:retail reckoning owns the floor.
Speaker:Apparently. Retailers are being hit with £1.35
Speaker:billion or more worth of returns.
Speaker:I saw that on the Retail Gazette. And according to other
Speaker:research, Brits will send back something like
Speaker:67 million Christmas gifts this year.
Speaker:We're an ungrateful bunch really, aren't we? Clothing, tech,
Speaker:toys, you name it. People are returning for all kinds of
Speaker:reasons. I mean good reasons like wrong size or duplicate
Speaker:gifts or just because they've seen what they got as a gift
Speaker:is now on sale. That's an interesting
Speaker:point. Takes me back to our Boxing Day Blues podcast a couple of weeks
Speaker:ago. So it's become the new festive tradition. You've spent 60 quid
Speaker:on something and you've given it as a gift with pride. Bing.
Speaker:Sale now on. There it is in your email. Same product, 30
Speaker:quid. Merry Christmas. No, no
Speaker:wonder we keep those gift receipts. What are people actually entitled to? And
Speaker:what do retailers need to know in terms of the consumers legal rights and
Speaker:the return mechanics? The first point is,
Speaker:under UK law, if you've bought an item online, you've got a
Speaker:14 day cooling off period to decide if you don't want it and then another
Speaker:14 days to send it back. You can reference this on
Speaker:gov.uk that is an absolute
Speaker:comes under the distance selling regulations. A retailer
Speaker:has got to refund you within 14 days of getting the item back.
Speaker:They cannot add a restocking fee if it's a normal
Speaker:return. That's not permitted. If you're returning under
Speaker:your statutory rights and if something's faulty, you're also
Speaker:protected under the Consumer Rights act, not to mention distance selling
Speaker:regulation. You could get a full refund, a repair or
Speaker:replacement and it all depends on the timing and the condition. And
Speaker:there's more about this also on gov.uk so it's worth
Speaker:understanding, as a retailer, what consumers are entitled to.
Speaker:Because if a consumer stands there and starts ranting at you and there's a big
Speaker:queue of people and it's busy and it's sale, you don't want to
Speaker:do the wrong thing. You want to be able to say, yep, I completely understand,
Speaker:thank you very much, and not have to engage in an argument that wastes time
Speaker:and causes people up and down the queue to think, what's going on there? Then
Speaker:then there's the other more nebulous side of returns, and that's
Speaker:goodwill gift receipts and credit notes. So a
Speaker:lot of retailers do offer extended returns
Speaker:windows after Christmas, not out of kindness, but
Speaker:it's sort of a business risk mitigation. It's more
Speaker:about, you know, the positive pr. And if you receive a gift on
Speaker:Christmas Eve or Christmas Day and then you fly off on holiday for two weeks
Speaker:and you haven't had the opportunity to return something, then it would
Speaker:be kind of unreasonable. Nonetheless, unless there's something that fits under
Speaker:the Consumer Rights act, it is purely a goodwill
Speaker:return, obviously, unless they've offered a gift receipt,
Speaker:because they're not obliged to give you your money back if there's nothing
Speaker:wrong with the product when you're out buying gifts.
Speaker:Gifts receipts do matter. And as a retailer, make
Speaker:sure you offer these, because without a gift receipt, you might not get
Speaker:the cash back. You might have to get a credit voucher or
Speaker:be forced into having an exchange. Now, some
Speaker:retailers only offer credit notes for returns, but
Speaker:that tends to be more for things that are on sale items.
Speaker:And that's legal. If it's clearly stated in their policy,
Speaker:you still do have your statutory rights, they can't be taken away under the
Speaker:Consumer Rights Act. So you need to check what's what. If you buy
Speaker:something on sale and you simply decide when you get home, I wish I hadn't
Speaker:bought that, then you're in tricky ground. If you buy it in the
Speaker:sale and let's say it's a pair of shoes and the buckle
Speaker:snaps off, well, you would suggest that that is of not a
Speaker:fit for purpose and that would fall into the classification
Speaker:of a statutory right under the Consumer Rights act, as it's now
Speaker:called, used to be known as the Sale of Goods Act
Speaker:1994 Consumer Edition, which is always a bit of a mouthful,
Speaker:returns. This is costing retailers a lot of money and
Speaker:it's quite problematic because reverse logistics, they're not set up
Speaker:for that flow as much as they're set up for the flow from
Speaker:warehouse to store. So reverse logistics are quite expensive
Speaker:because the retailers, whether you return to the store or whether you return
Speaker:by parcel, they have to handle the product,
Speaker:unpack, inspect, potentially put back on
Speaker:stock or potentially repackage or potentially
Speaker:send on to the manufacturer with their own complaint as to a quality
Speaker:problem. And high volumes of returns in January can actually
Speaker:kill off warehouse capacity. Because if you think about it, the stock in the
Speaker:warehouse just to, you know, replenishment stock,
Speaker:and if they're topping up stuff, sales stock, because often retailers will
Speaker:pull all the obsolete stock back from stalls, consolidate
Speaker:it, and then redistribute it out to stores for the sale.
Speaker:So they, they sort of rework the stock to make sure it goes to the
Speaker:most highest volume selling stores. So if you've got a warehouse
Speaker:that's trying to handle redistribution of sales stock and then taking
Speaker:on returns which need managing, then you
Speaker:have potential risk for gridlock in the warehouse. But
Speaker:also there's a risk to your brand because if you've not got a slick
Speaker:returns process, people may find that, you
Speaker:know, it's too much effort to deal with you and they might not come back.
Speaker:Because the research suggests that poor return
Speaker:experiences make people avoid a brand. It's just like any other
Speaker:part of the customer experience. Being able to return and
Speaker:not have an argument and not feel like, you know, you're
Speaker:being scrutinized for bringing your return back is part of
Speaker:the end to end customer experience. And actually people with the good
Speaker:returns policies actually sell more. Because if you're anything like me, you might
Speaker:buy two or three items in two or three sizes and
Speaker:two or three colors. So you can take them home, for example, if it's clothing,
Speaker:and try them on with other items you've already got in the wardrobe.
Speaker:And you know, I might buy a navy blue, a black, a gray and
Speaker:a red jacket in two different sizes because you're never quite
Speaker:sure how things are going to fit over your other clothes. And it's not as
Speaker:if you can take your other clothes out shopping with you. That would just be
Speaker:ludicrous. And I might send back the sizes that aren't
Speaker:right and the colors that maybe don't work. That doesn't
Speaker:mean I'm a bad customer. It means that by being allowed to do
Speaker:returns, I've inevitably spent maybe more. I might end up
Speaker:with two jackets instead of one. But then you do have
Speaker:serial returners, people who order, try
Speaker:and return everything so it's a cost that's
Speaker:disproportionate. Then you've got something called
Speaker:wardrobing that's really cheeky. People buy
Speaker:clothing, wear it for a night out, for example, and then
Speaker:send it back. It's more hassle than it's worth. A lot of times to
Speaker:argue with these people. Now, I might be being
Speaker:cynical, but this feels, again, a bit like the Boxing Day blues.
Speaker:Because some returns are genuine disappointment, but others are a little
Speaker:bit more calculated. They might return things because they can get a better deal
Speaker:now. And that links to the if only retailers
Speaker:gave a window. That said, if your product is in the sale
Speaker:for less than what you paid for, we'll refund you the difference.
Speaker:So this is, I kind of suppose, maybe
Speaker:the darker side of the Boxing Day magic and hitting the
Speaker:sales because it's not hology joy, it's
Speaker:strategic shopping and returns. You take your Christmas gifts with your
Speaker:gifts receipts out with you and spot if you can see them cheaper elsewhere.
Speaker:You return and then rebuy. But then that's the retailer's fault,
Speaker:isn't it? They brought it on themselves. If only they'd had that price promised, they
Speaker:wouldn't need to go to this much trouble. From a retailer's point of view, Christmas
Speaker:isn't over. After the sales end, the returns wave is just
Speaker:another part of the holiday margin game.
Speaker:And obviously they think they've made a certain amount of sales,
Speaker:they think they've had a good Christmas, but then they sit and wait and
Speaker:see what happens in late December and early January. For
Speaker:consumers, the constant back and forth. So buy,
Speaker:return, refund, rebuy. It's a little bit exhausting,
Speaker:like the hangover after the party. So there are better ways to
Speaker:do this. What's my advice? The
Speaker:better ways? I would say save your gift receipt. If you're a
Speaker:gift recipient, this is really important. If you want to get a return,
Speaker:you need to know your rights. But retailers, you need to know their rights.
Speaker:Your rights. Don't assume a credit note is all you can get. You need to
Speaker:check whether your return falls under statutory or
Speaker:goodwill policies and return early.
Speaker:If you're cancelling or returning under distant selling,
Speaker:start the clock as soon as you receive your item because you've only got
Speaker:so much time. You also need to think twice about returning
Speaker:something just because of the sales. Is it worth the hassle? I mean, if
Speaker:you're going to save five quid, but the parking is going to cost you seven,
Speaker:are the savings really worthwhile? And then
Speaker:you have to be kind. I'm calling to consumers now and we're all
Speaker:shoppers. Be kind when you return things because retailers are
Speaker:drowning in returns in January and they're suffering quite a
Speaker:high level of abuse from consumers at the moment. Yes, you
Speaker:still deserve clear and fair communication and everything else, but if
Speaker:they're rushed off their feet and they're not necessarily as quick to
Speaker:serve, just keep calm, let them
Speaker:do their thing. I've also done a blog about legal
Speaker:rights and costs on retailchampion.co.uk
Speaker:blog for any retailers who want to understand the consumer's
Speaker:rights. This seems to link back to Boxing Day
Speaker:Blues, but it's an extended set of blues and
Speaker:it is about the great return rush, the legal rights and
Speaker:the retail headache. Is there a better consumer strategy? Well,
Speaker:yes, there is. Is there a little bit of cynicism? Well,
Speaker:there's a bucket load of that because gifts have
Speaker:become. It's not just about who bought me this. It's often
Speaker:how fast can I return it and get something better. I
Speaker:think we're all a bit fickle. Maybe if we
Speaker:took a bit more time and stepped back and went with the old fashioned
Speaker:values of the thought that counts and maybe even had handmade gifts,
Speaker:we wouldn't be facing this problem. But it is what it is. We are
Speaker:in a relatively consumerist society as a retailer. If
Speaker:Boxing Day is your sort of emotional low,
Speaker:just know January turns out its sequel
Speaker:because we're all part of the same post Christmas remix. But
Speaker:if you play it smart and if you think about the
Speaker:transparency and the strategies we talked about in the Boxing
Speaker:Day Blues podcast, which if you scroll back through the episodes you'll be able
Speaker:to see, you can walk away feeling like you've made
Speaker:some positive steps, not just mistakes. So
Speaker:anyway, thanks for tuning in to Retail Reckoning. I'll be
Speaker:back next week with more retail insight, retail drama and maybe
Speaker:some sobering stats. I hope you have a wonderful Christmas and if
Speaker:you do need to do some refunds, make sure you get it
Speaker:sorted before the January sales hit. I've been Claire Bailey, this has been
Speaker:Retail Reckoning. Thank you for listening.
Speaker:Owns the floor
Speaker:Floor.
