Retailers, Shippers Prepare For January 5, 'National Returns Day'

The rise of e-commerce has led to brand new online shopping holidays such as Cyber Monday and Amazon.com, Inc. AMZN’s Prime Day. However, more online order deliveries mean more shipping returns.

United Parcel Service, Inc. UPS has embraced the flood of holiday shipping returns and is promoting its own special event: National Returns Day.

According to the company’s website, UPS will deliver a record 1.3 million returns on January 5. In addition, UPS will handle more than 5.8 million holiday package returns in a single week. Those returns mean big business for UPS and rival FedEx Corporation FDX.

On the other hand, the massive wave of order returns are bad news for major online retailers like Amazon, Macy’s Inc M and Wal-mart Stores, Inc. WMT. UPS estimates that online retailers will lose a total of more than $260 billion in holiday sales to order returns this year.

UPS chief marketing officer Teresa Finley sees the holiday return season as an opportunity for retailers to demonstrate their customer service.

“While returns can’t be eliminated, an easy to use returns experience should be one of several retail strategies to enhance customer loyalty and manage the cost of returns processing,” Finlay explained.

UPS reports that 44 percent of consumers have returned an online purchase in 2016.