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The Season of Giving Back: Gift Returns Rise

Saturday, 29 Dec 2012 | 3:02 AM ET
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The week after Christmas is when Americans "give back."

Give back gifts they don't want.

Returns are expected to jump 37 percent this holiday to $63 billion, according to Liquidity Services, a company which manages and resells returned merchandise for top retailers like Wal-Mart.

"Returns and overstock flows will be at record levels once again," said Cayce Roy, who heads the asset recovery division for Liquidity Services.

He said the number of returns continues to grow, especially as online shopping increases. Products bought over the Internet are more likely to be the wrong size, fit, or look and work different than expected.

(Read More: Did the Grinch Steal the Holiday Shopping Season?)

At the same time, retailers are making it easier for customers to return or exchange merchandise.

The Business of Returns
CNBC's Jane Wells reports holiday gift returns are gearing up, and it could impact retailers' bottom line.

"The retailers want to see an exchange, but more and more, consumers are demanding returns," Roy said.

Even if stores lose the sale through a straight return, he said making returns easy helps the overall customer experience and may build brand loyalty.

(Read More: US Holiday Retail Sales Growth Weakest Since 2008.)

According to Liquidity Services, consumer electronics are the most returned items—one in five such gifts will be taken back this year. Federal Express, however, said apparel is the top returned item, with a whopping 45 percent return rate. FedEx said a survey of consumers found the "worst gift givers" are spouses/partners, as nearly one in four presents from significant others is taken back. Coming in second place is "Mom"—who fails to please 20 percent of the time.

What happens to those returned items? For retailers who use Liquidity Services, much of the merchandise will be resold on sites like Secondipity.com. Some, however, won't be resold in the U.S.

"We have a broad range of apparel retailers, and for them it's very important that we protect the brand," Roy said. "In some cases we export them to other places in the world."

(Read More: Retailers' Run May Be Over: Analyst)

Retailers may weather the season of giving back and even boost revenues after Christmas, but it's not so great for their employees.

"So many returns and since it's not Christmas, people are really mean again," tweeted @EliEgger4.

"Returns KILL commissions," added @TaraDublinRocks.

They are also not a typical practice everywhere.

"It's really a uniquely American cultural experience," Roy said of the mad dash to return gifts. "In many countries, you just don't return goods."

That could be good news for retail workers willing to move overseas, like @Meggyboobear, who tweeted, "If someone returns one more thing I might lose it."

By CNBC's Jane Wells; Follow her on Twitter @janewells

Questions? Comments? Email us at consumernation@cnbc.com.

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