Flood of e-commerce returns causes backlogs in processing

E-commerce returns are flooding into parcel shipping networks this week as homebound American shoppers exchange large portions of the historic online buying wave pushed by the twin forces of pandemic restrictions and holiday peak purchases.

The volume of returns made through one e-commerce platform more than tripled on December 26th, compared to an average return day in the U.S., according to Returnly, a San Francisco-based provider of digital return experiences and post purchase payments.

In the face of that rush, consumers will see delays in refunds and resale turnaround times, due to a bottleneck effect created by record-high volume, extra long return windows, and slower action from shoppers, the firm said. “With record-breaking holiday sales, there is going to be a huge backlog of returns. This leads to unpredictability and longer refund times for consumers, which can quickly erode the trust they established with a brand," Returnly Founder and CEO Eduardo Vilar said in a release.

One factor in the trend is retailers’ willingness to expand the time allotted for returning products in direct-to-consumer (DTC) commerce. According to Returnly, shoppers have reached progressively deeper into their closets to return older goods ever since the pandemic began. The average age of returns—counting the time between order placement and and return creation—climbed weekly starting in mid-March and peaked in early August at 20 days, a near 100% jump from the start of the pandemic.

That condition also means that retailers will feel the impact of the reverse logistics boom for much longer than past years, as returned items take longer to ship due to those extra-long return windows, fewer back-to-the-office routines, and more people looking to avoid crowds. The data comes from a random sample of six million online consumers ages 18+ in the U.S. across six e-commerce verticals: apparel, accessories, footwear, jewelry, beauty, and electronics.

The growing delay in returns processing follows documented jumps in online orders, including a record high volume of holiday orders processed through Shipwire, an e-commerce order and fulfillment management system that is a unit of the supply chain management and e-commerce logistics provider Ingram Micro Commerce & Lifecycle Services.

Irvine, California-based Shipwire saw order volumes increase by 43% over last year during Cyber Week, the five-day period from Thanksgiving through Cyber Monday. Holiday sales also grew by 29% over 2019 rates in the extended period from November 22nd through December 6th.

“Successful peak season order fulfillment is a challenge in any year, but this year took extraordinary coordination, strategic planning, and accurate forecasting with our clients to ensure we delivered on their expectations,” Marcelo Wesseler, president of Shipwire and vice president of e-commerce services at Ingram Micro, said in a release.