RETURNS PROCESSING: Unfazed by online returns

That many catalogers are expecting big business from the ‘Net this holiday is no surprise. But with the projected increasesin Web shopping, mailers will likely have more returns to contend with come January.

But some catalogers that are new to the Web have yet to figure out how online sales will affect returns-or what they’ll do about it. “Since this is our first holiday season on the Internet, we have nothing to compare return rates against,” says Jeff Johnson, spokesman for Rivertown Trading. At press time, the St. Paul, MN-based gifts mailer of such catalogs as Seasons and Wireless was expected to have those titles online by November. Rivertown’s returns strategy at this point is to “have e-mail representatives on staff to handle returns inquiries,” Johnson says.

Other mailers are taking bigger steps to handle the potential increase in returns. San Francisco-based gadgets marketer Sharper Image, for one, purchased a second Little Rock, AR-based distribution center earlier this year, in part to ease the burden of returns coming from its Websites, including its auction site, says Meredith Medland, director of the Internet division. Sharper Image expects its online return rate to remain stable, but with more Web sales anticipated, the number of returns will likely rise. The firm is projecting $25 million in online sales this year, a five-fold increase from $4.9 million last year.

Instead of adding a distribution center, apparel cataloger/retailer Nordstrom simply allows its customers who buy online to return merchandise to any of its stores. This strategy should control holiday returns volume at the Seattle-based company’s distribution facility, says spokeswoman Amy Jones.

Then again, “I’ve seen nothing to indicate that online returns will be out of proportion as compared to our mail order business,” says Seth Miller, executive vice president/chief operating officer for Boca Raton, FL-based The Mark Group, which mails women’s apparel catalogs Boston Proper and Mark, Fore & Strike, and gifts title Charles Keath. Online sales represent less than 5% of total sales for The Mark Group, which launched online this year.

Statistics from Jupiter Communications support Miller. According to the New York research firm, 67% of online marketers have return rates of less than 5%. That compares to typical print catalog return rates of 5%-9% for hard goods, 15%-20% for high-tech products, and upward of 20% for apparel.

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