Can you believe that Christmas is nearly upon us? In a matter of weeks people all across the UK will be waking up to a day of gifts, celebrations, and TV specials. But if you are a retailer, we’ll forgive you for popping the champagne cork a little early – twenty days early to be precise. Why? Because December 5th is the first day of the festive month that brands actually make any money at all. This is why we’re calling today #RevenueReturnsDay!
You may well be reading this and thinking we’re either mistaken or mad. Surely December is the very best time of year for retailers to make money, with all of those party outfits to be purchased, gifts to be sought, and food to be stockpiled? It’s true that given the volume of sales, it really should be the most wonderful time of the year for the high street and e-commerce alike. Yet data collated by Laybuy shows that, in 2017, alongside the annual December increase in purchasing came a sky-high rate of returns, with total refunds adding up to a staggering £2.2 billion. Yes, you read that right. Plus, a further £510 million was spent by brands simply to process that volume of returns.
These huge numbers add up to around four days’ worth of trade for UK retailers – hence, from 1st– 4th December, brands make no money at all based on these figures. Four days of no revenue is a bitter pill for a retailer of any size to swallow, but the issue is exacerbated by the fact that UK brands are under serious amounts of pressure to perform – especially over the crucial Christmas trading period. So much for happy holidays.
So, how can retailers reverse the seemingly ever-increasing amount of returns and refunds? The answer is to offer shoppers flexibility in another guise. ‘Buy now, pay later’ payment solutions can be a great way to do this. At Laybuy, our payment platform offers consumers the opportunity to make interest-free payments towards products over six weeks. It’s great for consumers who often find it easier to manage multiple equal payments than one big hit to their bank account (which they may otherwise be tempted to try and recoup when they see the dent).
A manageable payment plan makes aspirational products affordable, with the added advantage to retailers that there is less chance of ‘buyer’s remorse’ than when shoppers have had to spend a chunk of cash in one go. Short of banning refunds, (which may not make you a very popular retailer), it’s one of the more likely ways to successfully reduce the hefty burden of returns in December, and perhaps even start to turn a profit a day or two earlier. Whilst it may be too late to effect change this year, it’s never too early to start planning for Christmas 2019.
In the meantime? Treat yourself to a glass of bucks fizz on the 5th, and celebrate your first day of Christmas on #RevenueReturnsDay. And get in touch if next year you’d prefer #RevenueReturnsDay to happen a little sooner.