Don't like your holiday present? That's a gift for FedEx and UPS. The companies stand to gain as fickle shoppers — and hard-to-please loved ones — send items back to retailers and other vendors in droves.
Consumers will return about $90 billion worth of goods this holiday season, estimates Optoro, a firm that specializes in the business of return shipments. That sum amounts to close to a quarter of the total value of goods returned each year, an amount that has been growing steadily as consumers shift their shopping online, according to Optoro.
Both FedEx and UPS have been trying to capture a bigger share of the returns business as retailers contend with demanding shoppers who want a generous and user-friendly return policy.
Returns are a major challenge to retailers who are facing costly return rates as e-commerce grows. Trevor Outman, co-founder and president of Shipware, a consulting firm aimed at vendors trying to reduce shipping costs, said return costs are among the top concerns of clients. One way to reduce costs, he recommends, is to reduce "dead space" in shipping boxes that might be too big for the item, which drives up prices.