The end of the Christmas shopping season means the start of the return rush.
Customers are returning more than ever thanks to the influx of online shopping — a staggering $890 billion this year alone, according to National Retail Federation estimates. So where is it all going?
CBS News Philadelphia got an exclusive look inside a massive new warehouse in Berks County where many of the items end up.
It looks like a scene straight out of science fiction, with robots racing in all directions with returns – criss-crossing paths to drop the items into their corresponding boxes.
The process takes place at a 100,000-square-foot Happy Returns facility in Shoemakersville, Berks County, Pennsylvania, where workers and robots sort and consolidate more than 45,000 items every day, according to site director Rob Diaz.
“The robots do the heavy lifting and deliver it to the boxes,” he said. “All we do from then on is pack the boxes, put them on the pallet and ship them to get them to the dealers as quickly as possible.”
Returns are pouring in from all over the East Coast, Diaz said, as far away as Maine, Florida and Tennessee.
Similar to Amazon’s partnership with Whole Foods, UPS-owned Happy Returns is working with a growing number of retailers to offer box-free, label-free, in-person returns at designated locations across the country. The company’s so-called “return bars” include UPS Stores, Staples and Ulta Beauty locations.
“The whole goal is to make the returns a little bit easier and a little bit better and also provide a little bit of friendly competition,” Diaz said.
It’s a response to the growing returns problem retailers are facing as more people shop online since the pandemic. Returns have doubled since 2019, and retailers expect their return rates to increase another 17% during the holidays alone, according to the National Retail Federation.
In response, many major brands have added shipping costs to returns to counter its rising costs. Logistics company Narvar estimates that a $100 item costs a retailer about $32 to recover and resell. Transport is one of the largest expenses.
“There are higher return rates on e-commerce purchases because of the lack of ability for someone to try something on before getting it, to feel it, to touch it,” said David Morin, Narvar’s vice president of customer strategy. previously told CBS News Philadelphia.
That’s where David Sobie, co-founder and CEO of Happy Returns, says his company comes in, giving retailers a better option to keep customers coming back.
“What we found is that when you make returns easy for online shoppers, they tend to shop more,” Sobie says. “They reward the retailers who make it easy to do this, and so what’s good for the customer will ultimately be good for the merchant.”
Sobie said combining returns to send them back to retailers saves significantly on shipping costs.
“Rather than having individual shipments go back one by one from shoppers to the seller as they deliver it to one of our locations, we can ship things to the seller in an aggregated way, making it easier for them to receive it . and cheaper,” he explained.
Everything with the ultimate goal of retaining customers return for more.
