Holiday Returns: How to Handle Holiday Returns


Retailers are gearing up for the approaching holiday return season amidst the rapid growth of holiday sales, together with an increase in returns.

In 2022, holiday sales topped previous years with $936.3 billion and a 63% increase in returns– 18% of their total sales.

According to a recent Coupa study, 83% of US supply chain professionals expect interruptions this holiday return season.

Navigating a lengthy shopping season, high fulfillment costs, labor shortages, and excess inventory are vital in the ever-evolving realm of supply chain management.

With inflation and rising living costs impacting buyers, the holiday shopping landscape has changed.

Around 50% of shoppers are now waiting for discounts and sales.

This shift has pushed shoppers to start their holiday shopping earlier than ever before. This forces retailers to adjust their campaigns accordingly.

This change poses fresh challenges compelling retailers to revise their strategies to meet altered market demands smoothly.

Preparing for Higher Return Volumes and Shipping Delays

Tired of hearing about labor issues? Unfortunately, the trend continues as labor shortages this holiday returns season cause disturbances.

61% of retailers are concerned about inflated wait times, and 54% are worried about shipping times.

To combat this, setting up effective return management systems and ensuring transparent communication with customers are crucial.

Also, streamlining the reverse logistics process can help ease high return volumes on the supply chain by creating systems to manage larger volumes.

Leveraging smart warehouse management systems and automated sorting solutions is essential to keep an organized warehouse and exact data, thus preventing potential revenue losses due to stockouts.

Dealing with Excess Inventory: Addressing Lingering Supply Chain Disruptions

In addition, to facing product shortages, retailers have been struggling with surplus inventory. This excess inventory continues to challenge supply chain professionals, requiring strategic solutions to minimize financial losses.

Employing dynamic pricing strategies, exploring innovative marketing campaigns, and forming partnerships to redistribute surplus stock can effectively alleviate the financial burden associated with excess inventory during the holiday season.

Unprepared: Consequences of Poor Planning

A difficult return policy does not just affect consumers.

When retailers do not prepare for the expected higher return volume, they may face:

  • Reduced Profits
  • Overwhelmed Operations
  • Inventory Management Challenges
  • Poor Costumer Experience
  • Increased Risk of Fraud

Overall, the failure to prepare can have far-reaching consequences that affect the bottom-line well into the new year.


Amid mounting challenges, supply chain professionals must remain adaptable and vigilant.

By implementing preventative measures, such as forecasting return volumes and efficiently managing excess inventory, supply chain players can fortify their operations and navigate the intricacies of the evolving market landscape.

Anticipating and addressing potential interruptions will be key in avoiding a disastrous holiday returns season.