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All Things Shipping | December 26, 2018

Holiday E-commerce Returns Predicted to Reach $37 Billion. Is Your Business Prepared?

The holiday shopping season is coming to a close, which means that online businesses need to be prepared for a possible influx in returned orders. Industrial real estate experts CBRE estimates that e-commerce returns will total $37 billion this holiday season.

Product returns especially impact online businesses, since consumers aren’t able to see or feel the product until after it is purchased and sitting on their doorstep. In fact, the return rate for online purchases ranges from 15 to 30 percent, while in-store purchases are returned at a rate of roughly 8 percent.

This begs the question: are online retailers ready for return season this year?

Shipping software Shippo recently surveyed e-commerce SMBs and consumers to shed some light on how consumer expectations are changing and whether retailers are meeting, not meeting, or exceeding these expectations. The 2018 State of Shipping survey highlighted what consumers expect from online retailers when it comes to returns and what SMBs are actually offering.

Here are a few highlights from the report.

Free E-commerce Return Shipping Got a Boost

27 percent of retailers offer free return shipping for all purchases—up 10 percent from 2017. This number will need to continue to increase in order to match the 41 percent of consumers that say they will only shop at stores with free returns. Even scarier is that 30 percent of retailers will swap stores in order to receive free return shipping.

Consumer Expectations for Return Shipping

On the other side of the spectrum, retailers who make customers cover return shipping has dropped from 56 percent to 45 percent. While this number is trending in the right direction, only 28 percent of consumers say they will pay for return shipping.

Online Retailer Product Return Offerings

Scan-based Return Labels Enable a Free Return Shipping Policy

Understandably, many online retailers are wondering how to offer free return shipping without spending a lot of time and money on shipping labels. One great option is to include a scan-based return label inside the outbound package. With scan-based return labels, the shipper is only charged if and when the label is scanned into the mailstream.

For more information, check out or How to Shippo video on creating scan-based return labels in the free Shippo web app.

Given that free return shipping is a prevalent consumer expectation, online retailers should look for ways to offer it without breaking the bank. Check out our other great tips on how to offer free shipping for your e-commerce returns.

Michelle McNamara is a Senior Marketing Manager at Shippo

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