Post-Christmas returns fall slightly, but £1.4bn worth of items are still winging back to retailers

‘Takeback Tuesday’ returns decreased by around 6% yesterday compared to last year, says ParcelHero. Despite the fall, around £1.41bn worth of items are now heading back to retailers, which could prove the final straw for some hard-pressed retailers.

Post-Christmas returns for the first working day of the year were down by around 6% on the same day last year, says ParcelHero. Despite this dip, it says around £1.41bn worth of items are now winging their way back to retailers. The home delivery expert cautions that the fall in returns is likely due to lower Christmas spending rather than a change in customer habits.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘We’ve looked at our own returns volumes and spoken to people in the courier and retail industries and it looks like there was a small but distinct drop in the volume and value of returns on “Takeback Tuesday” yesterday, compared to record returns last year.

‘Last year, around £1.5bn of unwanted gifts and goods were returned in the first week after the Christmas and New Year break. This year, we’ve seen a slight dip in returns volumes and, looking at the types of items being returned, we’re estimating around £1.41bn of clothing, electrical goods and toys are now winging their way back to retailers. The number of courier bookings for returned items peaked at 10am yesterday as people returned to the post-Christmas daily grind. The Royal Mail says Takeback Tuesday returns were up around 52% on a typical day last month and that certainly chimes with our own figures.  

‘We’d love to say the slight drop in the number of Takeback Tuesday returns is because shoppers are becoming more aware of the environmental impact of returns and the financial strains they place on many much-loved, smaller, specialist retailers.

"But it’s more likely the slight fall reflects what we suspect was a relatively lacklustre Christmas period for retailers, with online and in-store sales looking relatively flat. Fewer gifts equals fewer returns. Barclays says card transaction volumes on Black Friday 2023 were down -0.6% compared with 2022 and The Guardian reports that pre-Christmas “super weekend” sales fell by up to -32% online and -4.5% overall."

He added: "Our recent industry report shows that returns are costing UK sellers around £60bn a year. The study reveals a large chunk of these returns happen in the post-Christmas period. Around 47% of all ParcelHero shipments were marked as “returns” in the first week of last year.

"Online businesses face a no-win choice between reluctantly swallowing returns costs or risking negative online reviews from those customers with returns issues. 81% of stores say they are very concerned by increasing levels of customer returns. Smaller, specialist online retailers who thought they had enjoyed healthy Christmas sales are now facing plunging margins and warehouses filling with unsaleable stock as January returns come rolling back in.

"Customer expectations and the financial realities for smaller e-commerce sites are increasingly at odds. Some online retailers have told us that they deal with return rates as high as 60% after Christmas, with most being accepted unconditionally in order to maintain their all-important five-star ratings. These returns are being accepted despite the fact that online orders cost retailers £3 more to process than physical sales.

For more information on the full impact of returns on retailers large and small, don’t miss ParcelHero’s report,“ Retailers Reach the Point of No Returns” at https://www.parcelhero.com/content/downloads/pdfs/returns/returnwhitepaper.pdf

(Image courtesy of Mohammed Salem from Pixabay)

 

US Government shutdown delayed, but exporters should brace for Christmas disruption, warns ParcelHero

An 11th-hour deal means a potential US Government shutdown has been postponed until 17 November. But international parcel delivery expert ParcelHero says a long-term agreement looks further away than ever. UK exporters to the US should prepare for disruption before Christmas, it warns.

The US Government narrowly avoided a shutdown of many services after a stopgap funding deal was finally agreed last Saturday. 

The shutdown could have had an impact on UK-US trade and deliveries. But home delivery expert ParcelHero is warning the deal may have only delayed the inevitable until November 17th.

With mere hours to spare, the Republican House Speaker, Kevin McCarthy, managed to delay a Government shutdown for a further 45 days. 

Tens of thousands of US Government employees would have been furloughed without pay and many federal services suspended from 00:01 ET (5am BST) on Sunday.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: "The short-term funding deal is good news for the US economy and everyone who does business with America. But in truth it's only kicked the can down the road. And a deal in November now looks even less likely to be a success.

‘The Government funding bill was narrowly passed in the House when McCarthy struck a deal with the Democrats, in defiance of the hard-line right in his own party. Rebel Republicans previously threatened to trigger moves to replace McCarthy if he were to make such a deal. Now they have started proceedings that will end in his replacement, possibly with a Speaker less willing to seek a compromise. If that happens, the chances of a funding deal on 17 November look even more distant."

He went on to say: "If there's a US Government shutdown after 17 November, it could have an impact on UK businesses and individuals who are sending products, gifts and mail to the US. That’s bad news leading in to the peak Christmas season. Some of the services which may be potentially affected are:

Mail

‘Many traditional UK Post Office mail services and certain economy courier services to the USA make use of the United States Postal Service for final delivery. There were some fears a shutdown could disrupt low-cost UK-US mail deliveries.

‘However, the USPS is funded via the sales of products (like stamps) and services, and not directly by the US Government. That means deliveries shouldn't be interrupted.

"The US National Postal Mail Handlers Union says: "It needs to be emphasised that the Postal Service and its employees won't be directly impacted by a shutdown. The USPS isn't an appropriated federal agency, and Mail Handlers will still receive pay checks and will still report to work." US Post Offices should also remain open.

Customs and maritime shipments

"The US Center for Strategic & International Studies (CSIS) says a potential shutdown “will hinder the work of Government agencies that contribute to the foreign commercial activities of the United States”. That list includes US Customs and Border Protection, the Department of Commerce's Bureau of Industry and Security, the Department of Transportation and the Federal Maritime Commission.

"CSIS says: “Essential work from agencies such as Customs and Border Protection’s cargo processing and inspection at ports, will continue, but functions less essential to day-to-day work but ultimately critical to these agencies’ long-term capabilities, like training activities, will be suspended.”

"Likewise, Government activities related to imports and trade monitoring, such as tariff exclusion request processing, would likely cease.

Airfreight

‘Many UK products are airfreighted to America, often in the holds of passenger services. The US political news site The Hill reports US Transportation Secretary, Pete Buttigieg, has warned of potential disruptions in the airline industry, and highlighted the possible impact of a shutdown on air traffic control training:

“A shutdown would include, just in the transportation side alone, shutting down air traffic control training at the exact moment when the country recognizes the need for more, not less air traffic control staffing, and when we have finally got cancellations back at or below normal rates. 

"The air traffic controllers who would be working in the towers, they wouldn’t get paid. They’re under enough stress as it is doing that job without having to come into work with the added stress of not receiving a pay check.”

US services

‘Finally, during the last shutdown, almost 90% of the Department of Commerce’s staff was furloughed and the International Trade Commission was closed. Any progress on the elusive US-UK free trade agreement would also be further hindered. ParcelHero’s USA page will give live information on all available services in the event of a US Government shutdown, as well as full details on Customs advice, sending food, prohibited items, etc. 

‘The US is ParcelHero’s biggest individual overseas market. For expert advice on UK-US shipping, including Customs information, help for exports and prohibited items details, see: https://www.parcelhero.com/en-gb/international-courier-services/usa-parcel-delivery