A quarter of online Christmas shopping set to be returned

A painful Christmas period might be made even more unbearable for some retailers this month, according to fresh research which suggests one in four Christmas presents would be returned to the seller.

Analysis from the Centre for Economics and Business Research said around a quarter of all online purchases made between Black Friday and Boxing Day would be returned.

That would equal around £4.8bn out of £19bn in total online sales for the period, which the Centre suggested could make online sales figures misleading.

Research from Barclaycard showed that 37% of retailers had seen a rise in refunds since 2016, and while there were no solid figures for the total extent of returns in the UK, the CEBR said the conventional industry estimate for the US was that 30% of products ordered online were returned, compared to just 8.9% in bricks-and-mortar stores.

“The UK figure is likely to be similar,” it said.

It noted that the questionnaire for the official ONS Retail Sales Index did not specify how to account for returned goods.

“We assume that companies use their own data,” the CEBR said.

“Without doing more research … we suspect that companies net off the returns they process in a particular month against the sales that they make in that month.”

What that meant was that, while online was rising as a share of retail sales - or in a very high sales month - the data might not be a good guide as to the underlying trends, because of the extent of returns that were unlikely to be recorded until the following month, if at all.

“Our estimate of how much this makes the Index of Retail Sales a misleading guide is necessarily tentative.

“But our rough calculation is that the 1.4% rise in seasonally adjusted retail sales in November over October might exaggerate the underlying strength of sales by 0.5 percentage points as a result of this.”