January returns hurt December sales for retailers

Eastgate Shopping Centre. Photo credit: British Land

Retailers seeing a boost in December sales now wait with baited breath as January’s returns arrive.

According to the Guardian up to 40 per cent of clothing and between 5 and 10 per cent of electrical goods and homewares bought online or via catalogues are returned to stores by shoppers who have changed their mind.

With most retailers now operating on a multi-channel basis, allowing for the return of unwanted goods in January after December spending sprees is becoming increasingly complex. Research conducted by analysts at Javelin Group found clothing retailers see return rates of just over 30 per cent, but at Christmas and winter sales times this can be even higher.

The figures mean that many retailers' December sales are artificially inflated only to be depressed in the new year once goods are returned. What's more, as retailers improve their multi-channel operations for returning unwanted items, the discrepancy between December’s sales and the eventual results could grow even further. The Guardian reported that John Lewis saw its rate of returns rise from 10 per cent to 12 per cent over the past three years as online sales account for a larger part of its total business. Retailers including Next and John Lewis are now looking at ways to make allowances for December returns and in turn lessen the blow on January results.

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