Returns Spike Along With Holiday Sales

Group 1 - Retail order volumes increased by about 6 percent year over year during the holiday season, while post-holiday return volumes rose approximately 11 percent from 2024, indicating a significant rise in returns compared to sales growth [1][2] - The concept of "provisional purchasing" has emerged, driven by a downturn in consumer confidence, which fell to a 12-year low in January, affecting shoppers' willingness to keep purchases [2][3] - Consumer sentiment has deteriorated, with the Conference Board's present situation index components showing declines in perceptions of employment and business conditions, leading to the lowest confidence levels since May 2014 [3][4] Group 2 - The current economic climate has made returns a critical factor in consumer budgeting, as shoppers are increasingly selective about their purchases [4][5] - Retailers face risks if their return processes are confusing or rigid, as this could lead to losing customers entirely; brands that provide personalized service during returns are more likely to foster customer loyalty [5] - Some retailers are adapting by offering flexible and cost-sensitive return options, such as boxless returns, which can reduce processing expenses by 15 percent to 20 percent [5]