NEW YORK (AP) — Ah, the warm feelings of the holidays: Comfort and joy. Good cheer. And buyer's remorse. People who rushed to snag discounts on TVs, toys and other gifts are returning them for much-needed cash. The shopping season started out strong for stores, but it looks like the spending binge has given way to a holiday hangover.Return rates spiked when the Great Recession struck, and have stayed high. For every dollar stores take in this holiday season, they'll have to give back 9.9 cents in returns, up from 9.8 last year, according to the National Retail Federation. In better economic times, it's about 7 cents.
Some reasons for the many unhappy returns: Shoppers are binging on big discounts. Stores are desperate to get people in the door. But the same shoppers who find a “60 percent off” tag too good to resist may realize at home that they busted the budget.
In addition, stores have made it easier to take things back — letting online shoppers return items at no extra charge, offering more time to return or rolling out “no questions asked,” no tag or receipt required policies. But that can backfire, since spurring more returns wasn't part of the plan.
Stores also are undercutting each other in a tough economy. Consumer electronics in particular are being returned at a rapid clip — resulting in an expected $17 billion to be spent re-boxing, repairing, restocking and reselling electronics this year, up 21 percent from four years ago.
Liquidation.com, which buys returned merchandise from big stores such as Walmart and auctions it to small businesses and dollar stores, says return rates are 12 percent to 15 percent, two percentage points higher than last year and double the rate in better times.
Its four warehouses across the country are packed. To get rid of all that extra stuff, the company says it is holding 20 percent more online auctions than it did last year.
For stores already being squeezed by rising costs for materials and labor, the expected record year for returns make it worse. A paid worker has to restock that returned sweater. Return a computer, the hard drive has to be scrubbed. It adds up to lost dollars for stores, which have to eat as much as 12 percent of the cost for returned clothes and 50 percent for returned electronics.
With shoppers more concerned with their own bottom line these days, more is going back before it ever gets to Santa's sack.
“When the bills come in and the money isn't there, you have to return,” says Jennifer Kersten, 33, of Miami. She spent $300 the day after Thanksgiving on books, movies and clothes for her nephews. Last week she returned half of it.
Photo: Stock photo
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