Black Friday sales in the UK are set to grow again this year but retail returns may prove costly.
Specifically, retail returns following Black Friday could cost UK retailers almost £400m.
The figures and the warning are issued by Worldpay from FIS.
Its data shows that UK Black Friday transactions online and in-store were up 5% and 12% respectively year on year.
That trend is set to continue in 2019. Although the average Black Friday spend per shop declined around 7%, the high street could be set for a busier-than-ever event this year.
FIS data predicts a 4% spending increase in high street shops over previous years.
Black Friday brings hope for struggling retailers. Traditionally seen as bricks and mortar stalwarts, department stores presided over a massive 60% growth in online sales last year. And that trend that looks set to continue in 2019 as shoppers shift to online offers.
Black Friday sales booming but UK returns may hit £378m
However, retailers could be facing a serious hangover when it comes to returns. Based on 2018 data from the Worldpay from FIS payments platform, post-Black Friday returns could reach £378m in value. And this may lead to some retailers facing cashflow and profitability challenges.
Pete Wickes, SVP, Corporate, FIS, comments: “In today’s tough retail environment, it’s promising that Black Friday is getting more people out spending. What’s even more encouraging is traditional bricks and mortar retailers are driving huge growth through their online channels. Department stores may have had a tough year. But this data shows our high street staples aren’t out of tricks just yet.
“However, the mammoth spike in returns following Black Friday can’t be ignored. Unprepared retailers could face even greater losses due to processing and administration costs.
To minimise this, merchants must have a strong returns strategy in place. Our data shows that 51% of people won’t buy from a retailer that charges for return shipping. So while you might be enticing a new customer in with a Black Friday deal, charging for returns will certainly ensure they don’t come back.”