What: Retailers are seeing record volume of holiday-season returns. The cost to process these orders is growing as carriers have raised shipping costs repeatedly during the pandemic to cope with surging package volumes.

Why it is important: Besides improving product information and encouraging customers to bring unwanted orders in store, retailers must decide if returns should be free or not. The Operation Meeting dedicated to the Supply Chain topic on 4 April 2022 will deal with such questions.

Besides offering detailed size guides and information about products, some retailers partner with third-party services such as Happy Returns, which allows shoppers to drop off returns at one of its US 3,800 locations and then aggregates these returns for every brand partner. Retailers even team up to share the burden, with Kohl’s department stores accepting Amazon returns.

Sizing tools are already popular among major retailers. Gap uses True Fit, which recommends sizing based on a customer’s weight, height, age and sizes they wear from other brands. Ssense uses customers’ previous purchases to recommend sizing with a service called Fit Predictor. Some start-ups, including Perfitly and Modern Mirror, are developing augmented reality fit technology, where customers can provide photos and measurements to see how clothes fit on virtual avatars.

Shopify estimates that about two-thirds of consumers will check an online retailer’s return policy before they make a purchase. Offering free returns is one way to ensure they ultimately click the checkout button. Fabric, a logistics startup, found in a survey of 200 retailers that one-third consider introducing free returns as a top priority for 2022. Not having free returns does make the customer think about the purchase more. Also a higher shopping cart threshold for free shipping fends off impulse buys, which are more likely to be returned. Extending the returns window from 30 days to 90 or even 120 days can actually reduce returns too, as some customers wind up using an item or forgetting to ship it back, said AlixPartners.

How to deal with product returns frenzy