Manhattan Associates Inc. have announced its findings from a new study revealing that British consumers are expected to return £1.5 billion worth of unwanted Christmas gifts this year, highlighting the significant logistical and financial challenges facing retailers in the post-holiday period. Managing this deluge of returns efficiently and effectively is critical to maintaining both profitability and customer satisfaction.
From wrapping to returns: the journey of unwanted gifts
Unwanted gifts start with good intentions but miss the mark. From ill-fitting clothing to duplicate gadgets, gift returns initiate a complex reverse logistics process, with an estimated 67 million presents expected to be returned this year. This puts immense pressure on retailers:
Efficient returns management is vital during peak holiday season as businesses balance the need for streamlined processes with maintaining customer satisfaction.
– Craig Summers, MD UK/VP Northern Europe & MEA at Manhattan Associates
The research found that:
- Almost 23% of Brits exchange unwanted gifts for something else
- 21% donate unwanted gifts to charity shops
- 19% regift unwanted presents to new recipients
- 17% store unwanted gifts away, often in cupboards
- 12% return unwanted gifts for a full refund
- The most common Christmas gifts returned include:
- Clothing (42% of consumers have returned)
- Shoes/footwear (21%)
- Cosmetics (16%)
- Jewelry or watches (15%)
The returns challenge: why are shoppers so frustrated?
The returns process is a common source of frustration for consumers, with 39% citing long refund waits and 33% pointing to unclear policies as major pain points. These issues have real consequences for brands, with 40% of consumers saying they would avoid a retailer after a difficult returns process.
A seamless and customer-centric return experience is essential for building trust and fostering long-term relationships.
– Craig Summers, MD UK/VP Northern Europe & MEA at Manhattan Associates
This challenge is particularly pronounced among Gen Z shoppers, who returned gifts at a much higher rate (65%) last year than their older counterparts (19% among those aged 65+. Given Gen Z’s focus on sustainability, brands face additional pressure to not only streamline their returns, but also minimise the environmental impact of the process too.
A balancing act for retailers
Retailers are walking a tightrope. They need to meet customer expectations for easy returns while also managing the significant logistics of processing millions of items which erodes valuable bottom-line profits.
Investing in solutions such as robust reverse logistics and AI-powered customer service, coupled with clear communication and efficient processes, is crucial for retailers navigating this challenge effectively.
There’s more to returns than software and pound signs though. Retailers need to also consider the emotional aspect of returns. Customers often feel awkward or disappointed when returning gifts, and a smooth, empathetic process can make all the difference in maintaining loyalty and a positive brand experience.
– Craig Summers, MD UK/VP Northern Europe & MEA at Manhattan Associates
