Returns dent Black Friday’s appeal for both stores and shoppers: report

Shoppers love Black Friday, right? And how do retailers feel? Well, some love it and some avoid it. At least that’s the received wisdom. But new research suggests that the big shopping season comes with huge problems for both consumers and retailers who embrace it.

An investigation conducted by Censuswide on behalf of Visa subsidiary Tink found that 40% of consumers are less likely to participate in Black Friday this year due to cost of living issues, as 64% are cutting back on the number of non-essential items they buy overall. And 43% of merchants see the mega shopping event as simply a “necessary evil” for them.​Your business.

And one of the biggest problems for both groups is returns. Retailers estimate that a large proportion of items ordered last Black Friday were returned and almost a fifth of consumers are worried delays in refunds will leave them “in a significant financial shortfall”. But more of that later.

Censuswide spoke to almost 2,000 nationally representative UK consumers and over 500 online merchants in September. Their findings included that more than half (56%) of consumers expected to spend less during the holiday season as a whole.

Traders acknowledge this concern, with half (49%) anticipating a weak peak season, while one in four (27%) are worried about bankruptcy or insolvency.

It is interesting that “consumers are increasingly skeptical about the value [Black Friday] provides.” About 34% are less likely to participate because they already receive regular discounts throughout the year. And 48% of retailers say the discounts they offer during Black Friday are not significantly better than other times of the year, they tell us.

That said, up to 46% of traders say Black Friday “puts their margins under significant pressure” and 43% say it no longer offers the trading benefit it once did. But they feel they have to participate.

So what’s up with the big returns problem? The research also showed that returns and refunds come with problems. A big problem is that 46% of merchants said customers are returning “more items than ever.”

And they estimate that almost a third (31%) of items ordered on Black Friday were returned last year. Based on estimates from consumers who spent an average of £472 last Black Friday, Tink’s research suggests that on average almost £150 (£146.40) was returned from each order.

Merchants themselves (33% of them) identified the slowness in getting money back from customers as a problem and 19% of consumers are seriously concerned about the impact on their finances.

Given the heightened awareness of the negative experience around returns, it’s no surprise that 28% of merchants plan to invest more in their returns processes.