Why January 2 will be UPS’ busiest day of the year
Chauncey Alcorn, CNN Business
(CNN) — UPS expects e-commerce shoppers to purchase and return more merchandise than ever this holiday season.
The company released projected traffic figures on Monday estimating it will handle more than 1 million return packages per day in December, a record pace it expects will continue into the new year.
In a press release, UPS said the anticipated spike in returns is primarily being fueled by an increased use of e-commerce sites like Amazon, which make it easier for customers to receive and send back packages without leaving home.
“Gone are the days where returns were isolated to January, today’s empowered consumers will be sending packages back to retailers all season long,” UPS’ Chief Marketing Officer Kevin Warren said in a written statement. “As retailers start preparing for the busy holiday season, they should certainly be factoring returns into their business plans.”
Marketing and ad campaigns urging shoppers to buy gifts early are also expected to cause an even greater spike in December returns than in previous record-setting years.
In November and December, holiday retail sales are expected to grow between 3.8% and 4.2% from the same period in 2018, according to the National Retail Federation.
By the week before Christmas, UPS forecasts it will deal with 1.6 million returns per day, with 1.6 million packages being returned each day during the week of December 16.
Returns season is expected to peak again on January 2, known in the retail industry known as “National Returns Day.”
UPS said it expects to deal with 1.9 million returns on that one day alone — a 26% increase from the previous year.
These anticipated return figures are just for UPS and do not include what the US Postal Service or shipping competitors like FedEx may have to contend with.
E-commerce return rates in general and holiday e-shopping return rates in particular tend to be much higher at traditional stores. Brick-and-mortar retailers typically recorded an 8% to 10% return rate from customers bringing items back into the store in recent years, according to sales data collected by Shopify.
E-commerce customers returned products around 20% of the time over the same period. Holiday e-commerce shoppers sent merchandise back about 30% of the time.
High employment and economic performance numbers have fueled additional record-setting, e-commerce holiday sales figures over the last two years.
In 2018, Americans spent $126 billion online during the holiday season, a 14% increase from the $108 billion spent in 2017, according to Adobe Analytics.