2022 on track to be a record year for shopping returns
ALINA SELYUKH, HOST:
It's that time of the year again, returns season - unwanted clothes, appliances, doodads and gadgets all getting brought back to the store with requests for money instead. And this year is on track to be a record year for returns since we've already seen record spending. Peggy Alford is an executive vice president at Paypal, which has insight into millions of shopping transactions including returns. And she joins us now. Welcome.
PEGGY ALFORD: Hello. Thanks for having me.
SELYUKH: So now that we are in peak returns season with the tip of the peak happening in early January, returns company Optoro forecasts that shoppers will return $135 billion worth of stuff, which is up about 12% from last year. Are our returns habits changing from what you're seeing in your data?
ALFORD: Absolutely. They are absolutely up, as you mention. There are reports of nearly 50% of consumers expecting to return holiday gifts this year. And that means that 1 in 5 online purchases were returned this year. And that's up from 18% in 2021, as far as our data showed. And because of what's going on in the environment, you know, consumers are incredibly focused on making sure that they are getting the very best deal. There is no more I'll-just-buy-it-right-away-before-it's-gone-and-I'll-pay-full-price. It's really a focus on making sure that we're getting the very best price. But businesses know this, and we've seen more deal days. There's more sales in the last - in the past three to four months than we've seen in past years. There's an incredible interest in PayPal's shopping tools, showing that consumers are truly looking to stretch their dollars even further.
SELYUKH: Given that inflation does seem to be easing now, do you think this kind of intense deal hunting will continue next year?
ALFORD: Inflation and rising prices will continue to be a challenge for consumers in 2023, and we expect consumers to be more aware of the financial health than in past years. So, you know, our - the savings tools - The Ascent, which is a Motley Fool service, conducted research that found that two-thirds of Americans plan on making a financial resolution for the new year. But 81% of those surveyed also believe that the current inflation is going to make it harder for them to meet their financial goals in 2023.
SELYUKH: I understand that you guys have tracked some kind of pretty specific types of purchases that people have been putting on their wish lists or buying over the holidays. Could you talk a little bit about them?
ALFORD: Sure. We've seen electronics are the most watched item on consumers' drop lists. The most popular items being watched for discounts are video games, consoles, personal electronics, like tablets, and then wireless headphones, which my son has loved this year. We actually are seeing that products that are used when getting ready to leave the house, like hair wraps, clothing steamers, cosmetics, seem to be high up on the list, which would be new this year versus other years. And then, rise in pet ownership, which we saw a lot of over the pandemic, is then causing the rise in pet cleaning products like pet hair removals, upholstery cleaners for those pets that really haven't figured out what to do inside the house, as well as air purifiers.
SELYUKH: Interesting. In the past few months, we saw a huge increase in this trend of people shopping with buy now, pay later - paying for gifts, but also groceries, airplane tickets, in installments, which I understand is a big business for PayPal. How much are you seeing inflation affect that business?
ALFORD: I think it goes back to what we were saying earlier around just people being, you know, very concerned about their own economic situation and really trying to get the best deals. Adobe Research shows that the buy now, pay later industry generally is up 68% compared to last year. And so consumers are absolutely tightening their belts. I think people are concerned. I think uncertainty, in general, just causes stress for people. And because of all of the factors that are going into what our economic situation globally is going to look like next year, consumers are being extremely cautious - looking for deals, looking for ways to add flexibility to the way they pay. And this is just going to absolutely continue going into next year and probably through next year.
SELYUKH: That's PayPal Executive Vice President Peggy Alford. Thank you so much for speaking with us. And happy New Year.
ALFORD: Happy New Year to you. Thank you. Transcript provided by NPR, Copyright NPR.