January 9, 2025

Peak season is over! It’s time to breathe, right? Well, not exactly. While the busiest time of the year for ecommerce brands has come to a close, a new peak has arrived–the return peak. It only makes sense…with a spike in holiday gifts, products are bound to be returned (or exchanged). The return peak (also known as Returnuary) occurs throughout January, just after the traditional holiday retail season. By the time peak season returns are in full swing, it’s enough to drive retailers a little cuckoo. But with the right strategy, it could be the season you look forward to most. Returns Happen Holiday shopping behaviors have shifted in recent years, with more people choosing to buy early taking advantage of brand discounts and retail or reseller promotions. Think Black Friday, Cyber Monday, Amazon Prime Days, and more. This early shopping, paired with advanced inventory and demand forecasting tools, means meeting consumer demand is easier than ever. But no matter how well a brand prepares for peak demand, returned product is inevitable. Luckily, when returns occur, it doesn’t have to be a negative experience. A positive returns experience can boost customer loyalty and retention. Product Purchases Can Be Temporary Transactions 2024 U.S. holiday peak season sales surged beyond initial forecasts, led by vigorous consumption of last-minute online deals and generous conveniences, such as free delivery and curbside pickup. Compared to 2023, Mastercard SpendingPulse said online retail sales increased 6.7%. Data gathered by SalesForce BOPIS (buy online/pickup in-store) orders surged during the weekend before Christmas, Hannukah, and Kwanza, making up 40% of all online transactions. Chances are you’ve contributed to these statistics too! But the holiday peak season story is cycling into its second half: holiday peak season returns. Many online shoppers are used to purchasing multiple items in a single order and expect a portion of those products to be returned, costing ecommerce businesses billions of dollars. Returns software platform provider Optoro anticipates when the holiday peak season is all said and done, $173 billion in goods will be returned by the end of January 2025, leaving retailers holding the bag. Why Do Peak Season Returns Cause Chaos Ecommerce is a highly competitive space, and the pressure to meet customer wants can be overwhelming. Consumers know the more time they invest in online searching the more likely they’ll find the products they want, with pricing and other perks to match. Unfortunately, not all holiday purchases stick. In 2023, for every $1 billion in sales, $145 million of it was made up of returns, with that number expected to go higher this year. Product returns are common and the cost of processing, receiving, and stocking or reselling returns often exceeds what the product is worth. Less than half of retailers surveyed said they would hire more workers to handle returns, with 59% of retailers telling their customers to keep some items, instead of returning them, according to the NRF. So, what’s a brand to do? How to Prepare for Peak Season Returns Organize, optimize, and offer more, for less. Here’s how. Embrace reverse logistics like it’s your BFF, because it is. Customer returns are more than another touchpoint in the purchasing cycle—it’s an opportunity to engage with people who’ve already been introduced to your brand. Now that you have their attention, there’s no reason to let the moment go to waste. The product return experience is the next step in selling your brand, and a chance to build a customer relationship. But like all relationships, without laying the groundwork, it can get… complicated. How Ecommerce Brands Can Make Returns Easy Consumers hope their online purchases meet their expectations. When sizing, color, shape, texture, taste, or “I just don’t like it” happens, customers reluctantly start the peak season returns process. With fingers crossed, a phone call or chat begins. Where it goes depends on who is at the other end and how well ecommerce companies are prepared. There are ways to strike a healthy balance between easy-access returns and setting customer boundaries. When you provide clear details on what your returns policy is and offer options that make the returns process convenient, your audiences will appreciate the transparency and customer-first approach. Many retailers are adding: Stricter return policies Shorter timelines for refunds Purchase credits for longer return timelines Fees for delayed returns For brands that don’t have the space, staff, or technology to successfully manage returns, there are other ways to handle seasonal inventory return surges. Share the peak season returns load. Some businesses work with big box stores and set up multiple drop-off locations, similar to what Amazon and Kohl’s have. You could also use a returns management platform, like Loop returns, and design custom return experiences while protecting against transactional fraud. Retail, wholesale, and omnichannel businesses can defer to experienced third-party logistics (3PL) providers and fulfillment companies to manage holiday season returns seamlessly. By working with Kase, omnichannel order fulfillment and returns happen hassle-free, which is good news for your customers, your employees, and your bottom-line. Add Brand Value During ReturnsEven if a product return doesn’t amount to another purchase during holiday peak season, the process and people involved can make the experience memorable and, down the road, bring them back. Ecommerce companies are rethinking open-ended returns policies, moving away from the added costs to their business. But what’s interesting is how customers respond. Put yourself in your customer’s shoes. Have you ever heard of the scarcity principle? It’s an economic theory and a psychological driver used in retail sales. It goes like this: You’re shopping online, checking out the latest 2025 fashion-forward denim—it’s got to be super flare or extra wide-legged, and on sale, or it’s on to the next. Suddenly, the brands and styles you’ve been waiting for pop up for a limited-time-only price. Naturally, you jump on it because nothing feels worse than FOMO. The sample situation above is the scarcity principle in action. Ecommerce businesses can use it to enhance the product returns experience by meeting consumers at every step of the buy-and-return journey. When customers think they can order 10 items and only plan on keeping two, without consequence, the incentive to act quickly is gone. By adding holiday peak season policies and partnering with fulfillment and logistics companies that know how to deliver positive experiences, product returns open the door to new and continuing customer relationships. 5 Ways to Make Peak Season Returns a Breeze When you’re ready to look back on this year’s peak season experience and the impact customer returns made on your business, go through these recommendations to help make next year’s holiday season stellar. Use data to support return policies Simplify and modernize the refund experience Extend return windows for credit or exchanges Promote customer loyalty programs Cater to Gen Z, Gen X, and Millennials via smartphone-based shopping Peak Interest As automation will undoubtedly make a bigger imprint on how we do business, human contact is more important than ever. Post-purchase interactions can benefit from both, providing unique opportunities to increase brand awareness and impressions, while improving the customer experience. And while display screens can offer rich visuals, intuitive product suggestions, and FAQ chatbots, nothing can completely replace the power of human beings. Pinpointing the right strategy for your online retail business for the holiday peak season and throughout the year could be found in order fulfillment companies and 3PL providers that focus on serving ecommerce customers, like you. When you partner your business with Kase, we go above and beyond to ensure ecommerce is your happy place. Plan for next year’s holiday peak season now with Kase and have some fun.

5 Ways to Make Peak Season Returns a Breeze

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