The holiday season is magical, isn’t it? Sales soar, shoppers flood the stores, and products fly off the shelves. But just when you think it’s time to celebrate, the post-holiday return wave hits. It’s like the retail version of a hangover—returns pile up, inventory swells, and chaos ensues.
If you’ve ever thought, “Can’t we just skip this part?”—you’re not alone. There’s good news though, returns don’t have to be a constant struggle. With the right strategies, this headache can become an opportunity for growth and innovation.
Let’s face it: returns are the part of retail that managers and executives alike wish would disappear. According to recent data, holiday season returns in 2023 were estimated to total over $150 billion in the U.S. alone, with nearly 30% of all holiday purchases coming back. Clothing and electronics lead the pack in returns—because who hasn’t bought the wrong-sized sweater or the latest gadget that wasn’t quite right?
On average, retailers see a return rate of 17-18% during the holiday season. These statistics highlight the logistical and financial strain this period places on brands and retailers.
For brands and retailers, this surge creates unique challenges:
This isn’t a one-time problem. Returns can ripple through operations for weeks or even months after the holidays.
The truth is, returns don’t have to be a disaster. With a strategic approach, they can actually be an opportunity to boost sales, build loyalty, and clear space for new inventory.
Create a seamless return process
Customers dread complicated return policies. They want quick, easy, and stress-free. Offering extended return windows and flexible options like exchanges or store credit can make a world of difference. Bonus points for clear signage in-store and an intuitive online process—because nothing says “we care about you” like making returns hassle-free.
Use data to drive decisions
Returns are a treasure trove of information. What’s coming back and why? Are certain products consistently returned for sizing issues? Is a specific category underperforming? By analyzing this data, retailers can make smarter buying and merchandising decisions for the next season. Predictive analytics can even help forecast demand and avoid future overstock. Workforce platforms can play a key role in gathering and interpreting this data for actionable insights.
Once the return wave hits, the key is to act quickly and strategically to manage the influx. Here’s how:
Effective merchandising strategies
Returned items shouldn’t automatically be shoved onto the clearance rack. Thoughtful display placement can maintain full-price value and enhance the shopping experience. Highlight returned or seasonal items in curated sections, or pair them with trending products to create eye-catching displays. Effective merchandising strategies ensure these products stay appealing and continue to drive sales.
Strategic inventory turnover
Managing inventory turnover post-holiday is critical. Prioritize restocking high-demand items and repositioning slow movers. For products that didn’t fly off the shelves during the holidays, consider bundling them with popular items or offering them in flash sales to attract bargain hunters.
In the retail environment, genuine human interaction surpasses the connection of even the most sophisticated algorithms. When handled by knowledgeable, personable team members, returns become an opportunity to wow customers.
Building customer trust
A friendly associate (also known as, a retail hero) can transform the return process. By offering empathy and understanding, they can turn a potentially negative experience into a positive one. Imagine this: a customer returns a sweater that didn’t fit. Instead of just processing the return, the associate helps them find the right size, suggests complementary items, and makes the customer feel valued. That’s how loyalty is built.
Turning returns into new sales
Returns are the perfect moment to cross-sell or upsell. Customers are already in the store or on the website—why not guide them toward something they’ll love? Personalized recommendations, based on the reason for the return, can convert a refund into a new purchase. Trained and empathetic retail representatives excel at this kind of customer engagement.
The post-holiday return period is also a time to set the stage for the next big sales cycle. Whether it’s gearing up for spring collections or planning back-to-school promotions, the way you handle returns now impacts future success.
Plan inventory restocking
Ensure that inventory levels align with upcoming customer demands. Use data insights from the return period to adjust stock for high-performing items while clearing out underperformers. Incorporating insights from the people trained to dig into the data can ensure your staff is ready to execute these plans seamlessly.
Promote loyalty programs
Turn returns into a chance to engage customers. Offering discounts, loyalty points, or early access to new collections for return transactions encourages them to shop again—and again.
Returns may feel like the Grinch of retail, but with a strategic mindset, they can deliver more than headaches. By optimizing inventory turnover, streamlining processes, and engaging customers with empathy and care, brands can turn post-holiday challenges into lasting opportunities.
And hey, if you need a little help navigating the chaos, you don’t have to go it alone. Learn more about how maximizing the ROI of merchandising can set you up for success.