Holiday shopping: ‘Returns have definitely increased,’ goTRG CEO says

goTRG CEO Sender Shamiss joins Yahoo Finance Live to discuss how retailers are processing more returns this holiday shopping season and the effect it is expected to have on supply chains.

Video Transcript

ZACK GUZMAN: Well, it was a busy holiday shopping season, at least when you look at the latest report from MasterCard. Retail sales jumping nearly 11% versus 2019. And with more gifts being purchased out there, that could mean-- that could mean more returns.

I want to bring on the CEO of a company that powers returns for a lot of the big-name retailers you might have heard of, including Walmart, Lowe's, and Sam's Club. Sender Shamiss, goTRG CEO, joins us now for more on what to expect from returns this holiday season. And, Sender, I assume we might be seeing some more returns here. I'm not basing that off of what I got for Christmas, but talk to me about what you're seeing play out here and how companies might be positioned to handle all this.

SENDER SHAMISS: Thank you for having me on, and definitely we're seeing more returns. Return rates have increased because sales have increased. This Christmas season, about $820 billion in sales, so it's a rise of about 10%. The typical returns are about $650 billion worldwide and about $500-- well, $400 billion in the United States and an additional $100 billion in overstock and shelf pulls. So returns have definitely increased.

ZACK GUZMAN: And not only have they increased, but I assume the costs of handling all those have probably gone up as well, right? We're not talking just labor costs going up and handling that but also shipping costs and everything in between. Talk to me about what you've seen maybe on the back end with the cost of returns.

SENDER SHAMISS: Well, we know there's a supply-chain issue, and definitely there's inflation. Costs have gone up on labor. Costs have gone up on transport. Costs have gone up on material costs for packaging and things of that nature. Our business is a little more difficult than traditional manufacturing because we have to make sure that when we take back those items, we sanitize them. We remove any private data, things like any pictures, any of that data information. It's a little more rigorous than standardized manufacturing, the reverse logistics process. So definitely all costs across the board have gone up and even storage and transportation costs.

ZACK GUZMAN: What does it all mean for consumers, though? I understand what it might mean for the companies you work with and work for, but when it comes to maybe advice for consumers trying to now figure out if they want to keep or return their gifts, I mean, how does maybe this holiday season change some of the factors that would normally go into answering a question like that?

SENDER SHAMISS: Well, the difference between this year and last year is last year with COVID, what we saw was a basic shift in purchasing. People started buying things that they typically would buy when they nest, things like exercise equipment, larger items, home-renovation items.

This year, people went back to their normal shopping habits, and they started buying just regular goods, consumer electronics, a lot of apparel. What it means for consumers, the supply-chain crisis basically put a lot of fears into people, so they started shopping a little earlier. We had a survey. We had about 50% of respondents that said that they would avoid physical gifts, and about 48% of them ended up buying things like gift cards.

So people definitely are very aware of the supply-chain crisis and definitely did mitigate against the possibility of not having a gift and whatnot. But the typical big return season starts around Thanksgiving and ends well after January. Most retailers and manufacturers or vendors, they keep the product for a while to get through their busy season and only kind of process it right after the busy season not to block up their supply chain.

Obviously in the typical-- in the perfect setting, retailers and vendors would love to see their product back on shelves within a week, but it all depends on the type of solution they have and the kind of service provider or 3PL that helps them with that.

ZACK GUZMAN: Yeah, it's been a very unique holiday season, no doubt, a very unique holiday shopping season as well. Don't take it personally, though, if someone returns your gifts. That's what I always say. You know, it's just they just didn't want it. That's all. No harm, no foul there.

But, Sender, I appreciate you coming on here to chat with us. Sender Shamiss, goTRG CEO, thanks again for the time.

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