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Optoro, a returns processor, estimates that retailers’ costs of returning merchandise will rise by 59 percent in the next year. These rising costs can be controlled by a veteran retail executive.

According to Optoro data, this means that retailers will see a 17-dollar price rise per item they have to return. Returned goods will be 33 dollars more than a 50-dollar item to process.

From Thanksgiving to January 2022, 120 billion dollars worth of returned goods

Optoro also predicts that between Thanksgiving and January 2022, 120 billion dollars worth of goods will be returned. Due to disruptions in supply chains, higher logistics costs, and an adverse economic environment, prices are rapidly rising.

man in white button up shirt holding black and white box

Nikki Baird is a former retail analyst at Forrester, PwC, and curren vice president of retail innovation at Aptos. She shares practical tips with retailers on how to deal with these high costs.

Retailers should invest in technology that fits their customers and be attentive to what drives returns. It is possible to reduce returns more effectively than trying to increase shipping costs by changing pricing. Baird advises that if customers are happy to keep their purchases, there is no need to charge shipping fees for returns.

Retail innovation expert recommends that retailers look at ways to offset costs of returns, such as adjusting promotions or reducing operational costs. Retailers have few options. We are seeing that retailers aren’t passing on higher costs to customers, hoping the increase in costs will be temporary. One option is to raise shipping costs. Instead of 50 dollars for free shipping, it would be 100 dollars. To make delivery more affordable, I have seen retailers offer bundles. For example, if you are on clearance, you can get a grab bag with 10 items in your size for only 100 dollars. Baird says that this could be a promotion to “Buy these 3 items together” or free shipping.

Aptos’ executive suggests that retailers encourage customers to shop online and return to stores. “Return to store” is becoming a more popular option as it allows customers to get a refund quicker and gives them the option of picking the right item immediately. While it doesn’t prevent customers from returning items, it can make them less expensive for the retailer.