Reverse logistics is an annual headache for logistics practitioners at brick and mortar shops and websites alike, and the biggest demographic group to blame for the trend is Generation Z, according to a study from FedEx Corp.
Like an ebbing tide, the annual flood of peak season orders booked in November and December comes bouncing back every January in a surge of returns. The event triggers lost profits for many retailers forced to foot the cost for the "reverse logistics" process of sorting all those goods.
UPS calls it "national returns day," and said the event peaked this year on Jan. 2, with an estimated 1.9 million returns packages deposited by consumers into the UPS network alone, a 26% spike from last year's peak returns day and the seventh consecutive record year.
Looking at another group of shoppers, fully one in six Canadians was expected to return gifts after the holidays, according to the 2019 FedEx Returns Economy Survey, a poll conducted on behalf of FedEx Express Canada, a subsidiary of FedEx Corp.
Within that group, the chief culprit was Canada's "Gen Z's"—loosely defined as the generation born between the mid- to late-1990s—who said that 21% of their group typically return some holiday gifts, nearly double the 11% of Boomers (born between 1946 and 1964) who report returning gifts, FedEx said.
The survey even uncovered which gifts were most likely to get returned. Moms might want to skip this paragraph, but the statistics show that 36% of Canadian consumers report that they are most likely to return gifts from their mothers, based on responses from Canadians who said they typically return gifts. That rate was far above gift-rejection rates from other family members such as: fathers (22%), sisters (18%), brothers (17%), cousins (10%), grandmothers (8%), and grandfathers (6%).
To the relief of retailers struggling to sort those returns, many other shoppers don't even bother to return those misfit toys, but simply pass them along to another recipient. Nearly a quarter (24%) of Canadians in the survey admitted to re-gifting unwanted holiday gifts in a typical year.
"Gen Zs are undeniably driving gift-return behaviors in Canada," Lisa Lisson, FedEx Express Canada president, said in a release. "In fact, our survey found that 52% of Gen Zs have returned gifts for cash back or store credit. This generation will continue to contribute to a greater proportion of buyer control. For Canadian businesses, incorporating an effective returns solution is critical to ensuring positive customer experiences."
