Major surge in returns expected to increase during holiday season
Holiday shopping is expected to reach record highs this season, but a growing number of those purchases will be sent back, piling on to an already multibillion dollar problem for retailers. According to the National Retail Federation and return management company Happy Returns, returns in 2024 are projected to be 17% of all merchandise sales in the United States, totaling $890 billion.
The projected total is up from a return rate of about 15%, or $743 billion, in 2023.
As shopping peaks in the weeks ahead, stores expect the holiday return rate to be 17% higher than the annual rate.
Impact of online shopping
Retail experts said customers are now more comfortable with buying and returning habits due to the online shopping boom sparked by the pandemic.
Some of these habits include “bracketing,” which is buying multiple sizes or colors of the same clothing items with the intent to return some of those pieces.
In addition, 69% of shoppers admit to doing what’s known as “wardrobing.” That’s when a customer buys an item for a specific event and returns it afterward.
According to returns software company Optoro, wardrobing is up 39% from 2023.
According to data, 46% of shoppers say they return stuff multiple times a month, which is a 29% jump from last year.
Retail industry challenges
The current rate of returns creates major challenges for companies when it comes to lost revenue, environmental impact and managing all the returns.
In 2023, several retailers rolled out stricter return policies like shortening the return window and charging a return or restocking fee.
Some places, including Target, implemented a “keep it” policy in certain cases. That’s when the company offers a refund without taking the product back.
Other brands like J. Crew and Levis Strauss & Co. are trying buy back programs to keep goods in circulation.
Looking ahead
Improving the returns experience tops the list of retailers’ goals going into next year. While returns can cost the company, the vast majority of shoppers are more likely to buy from a place that offers easy returns.
Online-only stores like Shein, Temu changing how people holiday shop
The holiday shopping landscape is changing in the U.S., with online Chinese outlets Shein and Temu offering ultra-low prices and challenging traditional American retailers. For years, people have been turning away from brick-and-mortar stores in favor of fast fashion and online-only shops that offer seemingly endless choices and unbeatable prices.
With the way sites like these gamify the shopping experience –– including spinning prize wheels and countdown clocks –– it’s easy to get lost in the urgency and feel like every day is Cyber Monday, leading consumers to spend money more consistently and putting these Chinese companies solidly in place to challenge retailers in the West this holiday season.
Industry analysts say the allure of being able to buy more but spend less has millions of people looking for the perfect gift turning to these options.
Retailers tighten return policies as billions flock to online shopping
With analysts estimating shoppers would spend at least $13 billion on Cyber Monday, some retailers are upping the fees when it comes to returns. They say the main reason for the change is an increase in fraud.
According to the National Retail Federation, of $743 billion in returns in 2023, $101 billion, or 14%, were fraudulent. That’s a 10% jump from the year before. Businesses say that stealing is cutting into revenue.
The consulting firm McKinsey says retailers pay anywhere from $21 to $45 to process a single return. As a result, companies are passing some of that cost down to consumers. Saks Fifth Avenue now charges $9.95 for returns by mail. Neiman Marcus charges a similar fee, especially if items are returned after a certain date.
Saks is now conducting more thorough inspections of returned products in order to cut down on fraud.
However, those fees and scrutiny have lead to some pushback from angry customers when the retailer sends their item back without a refund.
One customer of Saks even went on social media to complain when the company refused to issue a refund on a dress that cost nearly $700. That same customer also filed a complaint with the Better Business Bureau.
It’s worth noting that shoppers can typically return online purchases at the physical brick and mortar store, for free.
Uniqlo risks boycott in China after CEO’s controversial Xinjiang comment
A Japanese retailer is facing a boycott in China after comments about where it sources its cotton. The global fashion chain Uniqlo is owned by Fast Retailing. The chief executive, Tadashi Yanai, told the BBC they don’t get cotton from China’s Xinjiang region.
“We’re not using cotton from Xinjiang,” Yanai said. “By mentioning which cotton we’re using … actually, it gets too political if I say anymore so let’s stop here.”
Critics in China latched onto the comment and urged a boycott of the brand.
Outside of China, using Xinjiang cotton is controversial after advocacy groups and the U.S. government accused the region of using Uyghur Muslims for forced labor production.
People on the Chinese social media platform Weibo are amplifying those calls to boycott Uniqlo, a daunting threat for any company reliant on the huge customer base China provides.
“With this kind of attitude from Uniqlo and their founder being so arrogant … they’re probably betting that mainland consumers will forget about it in a few days and continue to buy,” One person posted. “So can we stand firm this time?”
Labor allegations against China
In 2018, the U.S. State Department estimated that up to 2 million Uyghurs and members of other Muslim minority groups were detained in camps in the Xinjiang region.
The Chinese government denies any forced labor, insisting they are vocational training schools.
However, the BBC reported online documents uncovered evidence that upwards of half a million minority workers a year are picking cotton under forced conditions.
Worldwide impact
The issue is a big one for retailers worldwide. In 2021, China wiped H&M from e-commerce stores nationwide after the company decided to stop using cotton from Xinjiang.
And in September 2024, China’s Commerce Ministry launched an investigation into the parent company of Calvin Klein and Tommy Hilfiger, saying they suspected the company was “unjustly boycotting” Xinjiang cotton and other products “without factual basis.”
What to expect on Cyber Monday as big-box stores look to attract customers
The holiday shopping season is now well underway with stores pushing big discounts to try to attract customers. Come Monday, Dec. 2, lots of people will be online clicking the box that says “buy” or “purchase”, as Cyber Monday deals launch.
Amazon began running sales on Friday, Nov. 29, including 50% off headphones and 40% off household items including vacuums.
Target is expected to kick off its online sales on Sunday, Dec. 1, and extend them through Cyber Monday. There’ll be big discounts on items such as Airpods and Apple Watches, some for $200 or less.
Walmart will also begin offering online deals on Sunday, Dec. 1. Electronics, such as a 32-inch smart TV, will be available for under $100. Laptop computers will go for less than $150.
Some analysts are urging shoppers to consider the effect President-elect Donald Trump’s proposed tariffs might have on popular gift items. Trump has threatened to hit China with a 60% levy, plus Mexico and Canada with a possible 25% tariff.
Chip Lupo, from Wallethub, told Newsweek that electronics, appliances, cars and furniture would be specifically vulnerable to price increases because of their reliance on imported parts and materials. He named smartphones, laptops, tablets and gaming consoles as items that would see price hikes.
In 2023, Americans spent roughly $12.5 billion on Cyber Monday. That number is expected to hit close to the $14 billion mark this year, according to marketing experts.
The retailers vying to win this year’s shortened holiday shopping season
The holiday shopping season officially kicked off on Black Friday, but this year, holiday sales are expected to grow at the slowest pace since 2018. While inflation has significantly slowed, compounded inflation over the years has families thinking twice about big purchases or multiple smaller purchases.
The National Retail Federation (NRF) still projects Americans will spend more this year than ever before. Shoppers are edging ever closer to that trillion-dollar mark, with estimates holiday spending will reach between $979.5 billion and $989 billion, compared with $956 billion last year. That represents 2.5% to 3.5% growth, the slowest growth in six years.
One thing out of retailers’ control is the shorter-than-usual holiday shopping season. Thanksgiving came exceptionally late in 2024, shrinking the shopping season by five days compared with 2023.
Fewer days to capitalize is bad news for retailers and small businesses already feeling the inflation crunch. Target is one of them. The red retailer’s stock price plunged 22% after reporting the latest quarterly earnings and forecasting a flat holiday season.
“Consumers tell us their budgets remain stretched and they’re shopping carefully as they work to overcome the cumulative impact of multiple years of price inflation,” CEO Brian Cornell said on a call with analysts.
Despite efforts by Target over the past six months to slash prices on thousands of items, customers aren’t expecting to pay less at Target stores. Instead, middle- and upper-income shoppers are switching to Walmart, where the world’s largest retailer is feeling jollier about the upcoming holiday spending.
Walmart told its workers it plans to win the season, and expects holiday growth to outpace NRF estimates. Analysts caution that Walmart’s success is not a sign of broader retail industry health, since Walmart is snagging inflation-fatigued customers away from other stores.
Walmart is increasingly focusing on two fronts, in-store and online. Last quarter, Walmart’s e-commerce sales jumped 22%.
If Target is chasing Walmart, Walmart is chasing Amazon. EMarketer projects Amazon will capture 42% of all U.S. online holiday sales. They forecast Walmart’s share will be around 8%.
Amazon will also look to expand on last year’s initial success with interactive advertisements during its Black Friday football broadcast.
Overall, the NRF said holiday online shopping will increase 8% to 9% this year, accounting for about 30% of all holiday spending.
Mexico’s president refutes Trump’s claim she promised to close the border
President-elect Donald Trump said Mexico has agreed to stem the tide of migrants flowing into the United States, but Mexico’s president is now saying that’s not quite accurate. And Amazon workers are using Black Friday to make a statement about their labor situation. These stories and more highlight your Unbiased Updates for Friday, Nov. 29, 2024.
Mexico’s president refutes Trump’s claim she promised to close the border
As President-elect Donald Trump gets ready to return to office, he’s already making moves to follow through on some of his biggest campaign promises. After announcing this week his plans to impose tariffs on goods from China, Canada and Mexico, he turned his attention to another hot-button issue: immigration.
It’s a bit of a case of “he said, she said” after Trump had a call with Mexican President Claudia Sheinbaum on Wednesday, Nov. 27. President-elect Trump posted on his Truth Social platform after the call saying Sheinbaum agreed to stop migration into the U.S. through Mexico, “effectively closing our southern border.”
Sheinbaum appeared to contradict Trump in a post of her own on X, saying in part, “Mexico’s position is not to close borders…”
She did, however, lay out Mexico’s “comprehensive strategy” for addressing the migration issue. In a separate post on X, Sheinbaum said during the call, she told President-elect Trump, “No caravans are arriving at the border because they are being attended to in Mexico.”
En nuestra conversación con el presidente Trump, le expuse la estrategia integral que ha seguido México para atender el fenómeno migratorio, respetando los derechos humanos. Gracias a ello se atiende a las personas migrantes y a las caravanas previo a que lleguen a la frontera.…
The two leaders also talked about how they’re addressing the U.S. fentanyl crisis.
The call was scheduled after Trump unveiled plans to slap 25% tariffs on all imports from Mexico to the U.S. as part of the effort to stem the flow of illegal drugs into the U.S. through Mexico.
Not only would that impact the prices of avocados and agave — both very popular in the U.S. — Mexico’s economy secretary said Wednesday 88% of all North American pickup trucks come from Mexico. Sheinbaum then suggested Mexico could retaliate with tariffs of its own.
“I hope he rethinks it,” Biden said. “I think it’s a counterproductive thing to do. You know, one of the things you’ve heard me say before is that we are – we have an unusual situation in America. We’re surrounded by the Pacific Ocean, the Atlantic Ocean, and two allies: Mexico and Canada. The last thing we need to do is begin to screw up those relationships.”
Economists forecast Trump’s planned tariffs would increase prices for American shoppers, costing the average U.S. household about $2,600 per year, according to an estimate from the Peterson Institute for International Economics.
Israel and Hezbollah both claim ceasefire violations
Barely three days into a 60-day ceasefire between Israel and the Iran-backed militant group Hezbollah in Lebanon, both sides are claiming violations.
Yesterday, Hezbollah had a precision-guided missile manufacturing site—today, they don’t.
Hezbollah’s largest precision-guided missiles manufacturing site, 1.4km wide and 70m underground, was struck and dismantled by IAF fighter jets yesterday.
Lebanese authorities also said two people, who were trying to return to southern Lebanon, were shot and wounded by Israeli forces. Lebanon’s health ministry said they were civilians, but the IDF claimed they were suspected of violating terms of the truce.
The agreement, brokered by the United States and France, includes an initial two-month ceasefire during which Hezbollah militants will withdraw north of the Litani River and Israeli forces are to return to their side of the border.
Thousands of Amazon workers to strike from Black Friday to Cyber Monday
Amazon workers in more than 20 countries, including the U.S., are on strike on some of the busiest pre-Christmas shopping days across the world. It started on Black Friday, Nov. 29, a day for bargain hunters to score some of the biggest discounts from stores across the country as holiday shopping kicks into high gear.
Organizers told the United Nations the so-called “days of resistance” are to hold Amazon accountable for alleged labor abuses, as well as “environmental degradation and threats to democracy.” According to ABC News, the strike could delay holiday deliveries.
The organizers said this is their fifth year of labor action against Amazon during the beginning of the holiday shopping season.
In a statement, Amazon said the group that organized the strikes is being “intentionally misleading” and promoting a “false narrative.” Management said the company offers great pay and benefits.
Canada sues Google over control of online ads
Canada’s antitrust watchdog said it is suing Google over alleged anti-competitive conduct in the company’s online advertising business. They’re calling for Google to sell off two of its ad tech services and pay a penalty.
The Competition Bureau said it’s necessary because an investigation into Google found the company “unlawfully” tied together its ad tech tools to maintain its dominant market position. Google insists the online advertising market is a highly competitive sector and is fighting the allegations.
This comes just a week after the U.S. Department of Justice asked a federal judge to force Google to sell its Chrome web browser, saying it continues to crush the competition through its dominant search engine.
America facing a live Christmas tree shortage again
As millions of Americans get ready to begin their search for the perfect Christmas tree, growers are having historic challenges getting them to sale lots, according to the Wall Street Journal.
The day after Thanksgiving is usually the biggest day for live tree sales, but since Thanksgiving came so late this year, it’s a very short selling season. On top of that, a nationwide shortage is expected thanks to severe weather across the country this year, such as a northeastern drought and North Carolina floods caused by Hurricane Helene. North Carolina is the second-biggest supplier of Christmas trees in the country.
Shoppers bought roughly 21.6 million real Christmas trees in the U.S. last year, according to the National Christmas Tree Association. The Department of Agriculture said the number of trees harvested in the U.S. has declined 30% since 2002, while the American population has grown 16% over the same period.
Alaska native air drops Thanksgiving turkeys to families in remote areas
In the most remote parts of Alaska a Thanksgiving turkey is hard to come by. So, one woman made sure families in roadless parts of the state had their holiday feast.
Pilot Esther Keim calls it “Alaska Turkey Bomb.” She flies in a small plane to off-the-grid homes and air drops frozen turkeys for families to enjoy for Thanksgiving.
Keim said it’s a tribute to a family friend who did the same thing for her family when she was growing up.
She started the tradition in 2022 after somebody that she knew told her they did not have much of a holiday dinner — and no turkey at all. Since then, she has delivered 30 to 40 turkeys every year to families living in remote areas of Alaska.
Macy’s says employee hid up to $154 million, delays earnings report
Macy’s delayed its earnings report as it deals with a multi-million dollar accounting scandal. The company said one employee is responsible for intentionally hiding up to $154 million worth of expenses across three years.
That employee, who’s now fired, is accused of making fraudulent accounting entries while managing small-package deliveries.
Macy’s said it identified the issue in one of its accrual accounts earlier this month before an investigation was able to trace it back to the employee.
As a result, the company had to pause its quarterly earnings report expected Tuesday, Nov. 26.
“While we work diligently to complete the investigation as soon as practicable and ensure this matter is handled appropriately, our colleagues across the company are focused on serving our customers and executing our strategy for a successful holiday season,” Macy’s Inc. chairman Tony Spring said.
This comes as many retailers, including Macy’s, experience struggling sales.
The company announced earlier this year it would be closing around 150 stores over the next three years in an effort to energize its business.
As of Monday, Nov. 25, Macy’s shares were down 3.5%.
Amazon workers in 20 countries plan Black Friday, Cyber Monday strike
Thousands of Amazon workers from around the world are planning to strike again on one of the biggest shopping weekends of the year. This is the fifth holiday season in a row for Make Amazon Pay protests, when warehouse staff and delivery drivers strike in support of workers’ rights and climate action from Black Friday through Cyber Monday.
Employees in 20 countries, including the United States, United Kingdom, Germany and Japan, are demanding higher pay, the option to unionize, and a company commitment to environmental sustainability.
It’s all led by a pair of social and economic justice organizations, UNI Global and Progressive International.
“Amazon is everywhere, but so are we,” Progressive International’s Co-General Coordinator Varsha Gandikota-Nellutla said. “By uniting our movements across borders, we can not only force Amazon to change its ways but lay the foundations of a world that prioritizes human dignity, not Jeff Bezos’ bank balance.”
According to numbers from Amazon, employees in the U.S. can earn between $18.50 and $29.50 per hour depending on the position and location.
A 2023 report by the National Employment Law Project found that warehouse workers in areas with Amazon fulfillment centers make $822 less a month than warehouse workers in areas that don’t have Amazon fulfillment centers.
It’s not clear exactly how much more money Amazon workers are asking for, but they specifically want hazard pay and premium pay for peak times.
When it comes to environmental concerns, the advocacy groups are asking Amazon to commit to zero emissions by 2030 and to transition to electric vehicles.
An Amazon spokesperson said in a statement that it is already taking a proactive stance against climate change by becoming the world’s largest purchaser of renewable energy.
“These groups represent a variety of interests, and while we’re always listening and looking at ways to improve, we remain proud of the competitive pay, comprehensive benefits, and engaging, safe work experience we provide our teams,” Amazon said.
What holiday toys made the 2024 best and worst lists?
One thing on the minds of most parents this time of the year: “What are the hottest holiday toys and how can I get my hands on them?” Whether it’s Cabbage Patch Kids, Tickle Me Elmo or Hatchimals, there’s always been at least one toy that causes a frenzy.
The group has released its 52 annual list of nominees of the toys it says parents should be wary of.
One toy on the list is the Pinovk Toy Colt 45 Pistol. W.A.T.C.H. says toy guns like this can be mistaken for real weapons and can lead to tragic outcomes.
World Against Toys Causing Harm, Inc.
Another toy making the “worst list” is the Kinetic Sand Scents kit which consists of sand-based “ice cream treats” of various flavors. It comes with tools to “scoop & serve,” as well as a warning of “do not eat.” W.A.T.C.H. says this poses a potential for ingestion injuries.
And then there’s the Wubble Rumblers Fists. W.A.T.C.H. says they pose a risk for blunt force and impact injuries.
“Our goal with the ‘10 worst toys’ list is to help families make informed choices and keep kids safe,” Joan Siff, president of W.A.T.C.H., said in a statement. “Toy safety is about stopping potentially unsafe products from reaching children in the first place.”
So, while the kids are making their toy lists, parents are advised to check what other lists those toys may be on before heading out to battle the crowds this holiday season.
