After the second week of business in 2021, the numbers are in; UPS returns for the 2020 holiday shopping season accounted for roughly 9 million packages. This figure represents a 23% increase over the same week-long period last year, when UPS holiday returns came out to about 7 million parcels.
The Reasons for all the Record-Breaking UPS Returns
In the early part of 2020, 7 million parcels was in and of itself a record-breaking number of returns. However, this year’s 23% increase makes 7 million packages look like rookie numbers. Interestingly, despite this year’s surge, the record for the highest amount UPS returns in a single day is still 1.9 million parcels, set on January 2nd, 2020.
This year’s significant uptick in returned package volume is indicative of both the current state of the world, and growing online consumer trends. Here are the main elements that contributed to this year’s record-breaking number of returns for UPS:
The Growing Shift to eCommerce Coupled With a Global Pandemic
The most obvious reason for the huge number of returns is simply the enormous amount of shipping volume that all carriers currently see. eCommerce volume has surged during the Coronavirus pandemic, while other retail trends such as in-person shopping have been all but decimated. As a result, with more shipping volume than ever before, more returns are inevitable.
UPS Vice President of Global Retail Nick Basford commented on the growth in eCommerce that the pandemic only boosted:
“The leveling out of returns across many days can largely be attributed to shifting purchasing habits accelerated by a global pandemic.”
Consumer Trends Like “Bracketing”
It’s not just the state of the world that’s contributing to growing numbers of returns for UPS; it’s also evolving consumer spending habits. When it comes to online shopping, consumers have taken to a process known as “bracketing” in recent months.
“Bracketing” refers to a phenomenon where a customer will order several sizes or variations of the same item. When they receive their package, they’ll keep the one that they prefer best. Then, they return all the other products back to the retailer. As a result, eCommerce businesses face huge return costs for the sale of merely one item.
Online returns can cost retailers $10–$20 per item, and return rates typically hover between 25-30%. When too much bracketing occurs, some companies choose to simply refund customers and letting them keep the items instead of processing exchanges for all of the returns. In some cases, it’s more expensive for companies to process every return they receive than to offer refunds from the get-go.
UPS Isn’t the Only Carrier Facing Unprecedented Returns
The record-breaking number of returns isn’t just affecting UPS; it’s hitting all the major shipping carriers equally. For FedEx, returns were also elevated beyond historic levels during the last six months of 2020…and the company expects the trend to continue well into the new year.
On the company’s earnings call on December 17th, Chief Marketing and Communications Officer Brie Carere provided the following quote:
“With the return season upon us, we expect these record highs to continue over the next several months.”