The underbelly of e-commerce is a booming business in which little-known companies collect, process and often resell piles of unwanted gifts, flawed merchandise and other items that shoppers simply regretted buying. This holiday season, goods with an original retail value of $19.4 billion—nearly one-quarter of e-commerce sales—are expected to be returned, according to Shorr Packaging, a distributor of packaging to retailers and other businesses.
Return rates can vary widely, but generally between 10% and 15% of all online purchases are returned, though the rate can exceed 30% for certain categories such as apparel, estimates logistics-provider Optoro. A main reason is the increasing use of free-return offers by online retailers.
Total returns for 2015 are expected to be $260.5 billion, or around 8% of all retail sales, according to trade group National Retail Federation. Physical store return rates tend to be lower, at around 7%, according to Optoro.