Fashion retailers hit by £1.6bn due to Black Friday returns

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Fashion retailers across the UK have been hit by a £1.6 billion bill as a result of returns from the Black Friday sales.

Overall, retailers will see a £2.4 billion impact on margins due to an increased amount of customer returns predicted to take place between Black Friday and Christmas Eve, according to research conducted by Rebound Returns.

This is a further increase from the £2 billion impact in 2017.

ReBound analysed data from 40 UK retail companies and determined December 3 was the date with the highest number of returns. 143 per cent more items were returned on that date than any other day.

In total, UK fashion retailers will face an increased £6.6 billion impact for 2018, up from £5.7 billion last year.

Returns during the peak trading period affects retailers due to the difficulties of recovering returns costs when items are resold. Returned items are not usually processed until January, therefore they are resold at a discounted value in sales.

This decreasing resale value, as well as the high cost of processing returns – including cleaning, tagging and reselling – is the reason for the negative impact on margins.

“At such a busy time, many retailers only turn their attention to processing returns in January, and this has severe consequences for their margins,” Rebound chief executive Graham Best said.

“At such a busy time, many retailers only turn their attention to processing returns in January, and this has severe consequences for their margins.

“Ultimately this problem comes down to tracking, as retailers often aren’t aware of the value of stock being returned to them until they begin opening packages in a warehouse.”

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