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Traditional Stores Still Trounce E-Commerce When It Comes to Returns, New Survey Says

'Tis the season for bringing all those gifts back

Americans returned nearly $284 billion in merchandise in 2014.

Now that all the holiday gift giving is over and done with, we've come upon the early-January echo effect that nobody really talks much about: 'Tis now the season for taking gifts back. What's more, a new survey suggests that returns and exchanges might be one area in which traditional brick-and-mortar retailers are mopping the floor with e-tailers.

According to a just-released study by Retale, a location-based app and website that aggregates retail circulars, a whopping 70 percent of shoppers would rather return that not-so-perfect gift at a traditional store than try to do the transaction online, with over 62 percent approving of the in-store experience.

"When people rated convenience, the store was the clear front runner," said Retale president Pat Dermody. "It'll take you five minutes. Online returns are harder. That's something that stood out."

Post-holiday returns and exchanges are a huge, if largely unseen, part of the shopping season. According to the National Retail Federation, Americans returned nearly $284 billion in merchandise in 2014—an increase of 7.6 percent over just two years earlier. Every year, Americans take back nearly 9 percent of the items they receive. The United Parcel Service proclaimed Jan. 6 as "National Returns Day," expecting to have transported 4 million returned parcels by that date.

While all retailers have reason to get jittery around this time of year, given the $3.8 billion epidemic of return fraud, exchanges are historically more common than returns because consumers often just want a different size of the same garment. This, Dermody said, at least allows the retailer to keep the money in the register drawer. Some retailers have also begun to experiment with new software that helps reduce the likelihood that an item will be brought back.

Still, returns and exchanges are inevitable, and it's not difficult to see why shoppers would rather conduct the transaction in a brick-and-mortar location: There's in-person help (usually), and you can walk out the door with the item you prefer (again, usually).

Dermody points out that brick-and-mortar retailers have been working hard to gain that edge. Many stores will now exchange items without the original sales receipt (try that with an online transaction). Retailers have also improved their inventory management systems, so an item purchased online can now be returned at the nearest store location—an option that 85 percent of consumers say they want.

"Four years ago, retailers' inventory systems—the online warehouse and the store's inventory base—didn't talk to one another," Dermody said. "It was a nightmare, and a disappointment for the customer."

Retale's survey also suggests that online retailers, who've scrambled to reduce the number of clicks it takes to buy an item, might now want to pay similar attention to the returns process. Last year Amazon began accepting certain items for returns via their delivery lockers. But that's still a four-step process that includes visiting the Online Returns Center, finding a box and heading off to one of the lockers. Little wonder that nearly 40 percent of the Retale survey's respondents said Web-based returns and exchanges are still "inconvenient."

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