business news in context, analysis with attitude

by Kate McMahon

The sales pitch: Hassle-free holiday returns from a national online retailer at a local “Happy Returns” bar - no packing slips, labels, packing tape or boxes required and an immediate refund to your credit card.

My reaction: Yeah, right.

Wary of standing in line (again) at the Post Office, replacing the ink in my printer, and finding just the right size box (again) and the roll of packing tape, I read about the start-up Happy Returns on MNB and decided to give it a try.

My verdict: Happy returns, indeed. I drove four miles to the closest return bar, stepped up to a designated register, handed over a sweater purchased online from Everlane, and gave the associate with an iPad my email address. Within 90 seconds the transaction was complete and $55.01 had been refunded to my credit card. Done. No paperwork. No tape (red or otherwise). No line.

Holiday returns are expected to reach a whopping $90 billion to $95 billion worth of merchandise this year, up 15% to 20% over last year, according B-Stock Solutions, which runs online liquidation sites for major retailers.

United Parcel Service said the holiday return season now kicks in about a week after Black Friday and peaks on January 2nd - “National Returns Day” – when it expected to process 1.9 million packages.

For retailers, the burgeoning boost in e-commerce - and returns - presents both opportunities to convert returns into new sales as well as logistical headaches and literally billions in losses when all those unwanted sweaters and more pile up in a return warehouse.

Spurred on by Zappos’ early consumer-friendly policies and now Amazon Prime and more, shoppers not only want but expect free shipping and returns. And more buyers view e-commerce apparel shopping as a virtual “dressing room” – ordering several sizes just to find the right fit. (Full disclosure: I have done just that on occasion.) Bloomingdale’s even includes “bought multiple sizes/colors” as a reason for return.

According to UPS, the hassle of mailing back items prompts some 30% of U.S. shoppers to return online merchandise to a brick-and-mortar store. One analyst compared the scenario to a qualified shopper walking in “with what amounts to a gift card.”

This is where it is incumbent on retailers to make in-store returns frictionless – through return forms that can be completed online in advance to in-store “return kiosks” and enough sales associates to handle returns, and hopefully, additional sales. (Note to shopping mall operators: shoppers want free parking, as well.)

This is also where the Amazon/Kohl’s partnership, the innovations by Nordstrom Local and new ventures such as Happy Returns come in.

Amazon tested a program allowing for online returns (no label, no tape) at Kohl’s stores in 2017 and expanded nationally to more than 1,150 locations last summer. It’s a win-win for both Amazon and Kohl’s, just as long as the Kohl’s customer service team can handle the volume. In my one attempt to make an Amazon return there, I languished in line behind a customer attempting to return a seemingly worn coat with a broken zipper and no receipt. I bailed and went to the UPS store. If this really is going to work, there needs to be a dedicated Amazon counter.

Other such partnerships include FedEx allowing consumers to drop off returns at Walgreens Boots Alliance stores, and UPS striking a similar deal with Michaels craft stores.

I think the most interesting is Nordstrom accepting returns from rivals such as Macy’s at its new Nordstrom Local stores in LA and Manhattan. These urban outposts are all about customer service – there is no merchandise unless you have had an item shipped there. But there are personal stylists, tailors, shoe repair services, donation bins for clothing to help the homeless, along with wine and cappuccino. And at the Upper East Side Nordstrom Local, appointment-only professional stroller and car seat cleaning is available. Really.

My Happy Returns experience took me for the first time to a nearby Harmon Face Values, a discount health and beauty supply store owned by Bed Bath & Beyond. It is one of 700 “return bar” locations in stores and malls across the country accepting returns from national e-commerce retailers such as Everlane, Rothy’s and Revolve clothing.

And since my return transaction was so quick, I found time to pick up a few items, which I hadn't planned to do, but which made it a win-win-win for all parties involved.

Comments? Send me an email at .

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