Is there a retail marketing opportunity in unwanted gifts?

Discussion
Jan 18, 2017
Tom Ryan

According to a new YouGov survey, 30 percent of people rid themselves of at least one holiday present this past holiday season.

The top option for disposing of unwanted gifts is re-gifting with 42 percent passing an item on to someone else. A recent eBay survey found the most popular re-gifted items were knick-knacks; bottles of wine or spirits; DVDs, CDs or books; and bath products. Consumers were less likely to re-gift technology and electronics items, jewelry and handmade gifts.

The YouGov survey found that 32 percent of respondents felt re-gifting is unacceptable.

Many options for disposing of unwanted gifts depend on return policies. According to the YouGov survey, 40 percent returned one of their gifts for store credit, 38 percent made an exchange and 31 percent returned an unwanted item for cash. Other alternatives for dealing with unwanted gifts include storing them away in a closet or cupboard, cited by 40 percent; and donating to charity, 34 percent.

Not so surprisingly, the eBay survey pointed to selling unwanted items as another option. Of those who said they planned to dispose of an unwanted present this year, 40 percent indicated they would sell it on eBay.

The primary solution retailers seem to offer for bad gifts is a generous return policy. Target, TJ Maxx, Kohl’s and Macy’s all offer store credit for returns without a receipt, although determining the value of the item may disappoint. Macy’s offers credit on the item’s lowest selling price within the last 180 days. Walmart is among the few offering the option of a cash refund if the purchase was under $25.

Can unwanted gifts be a marketing opportunity? For the second year in a row, a Skittles Holiday Pawn Shop opened in Toronto from Dec. 26 to 30, offering to exchange candy for unwanted holiday gifts. On Dec. 26, select Burger King locations in Miami, London and Brazil let customers bring in gifts of any value to exchange for one Whopper. In both cases, the gifts were donated to charity.

DISCUSSION QUESTIONS: What more can retailers do to help consumers deal with unwanted gifts? Do you see unwanted gifts as a marketing opportunity for retailers?

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8 Comments on "Is there a retail marketing opportunity in unwanted gifts?"


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Chris Petersen, PhD.
BrainTrust

In the UK and Canada there is a specific day dedicated to customers returning unwanted gifts — Boxing Day occurs the day after Christmas when customers are literally sorting things out they don’t want after the biggest gift giving time of the year. The astute retailers plan promotions and staff for Boxing Day as a way to generate store traffic and create sales.

There is however a growing challenge with returned gifts. With the increase of purchases online, many want to return those gifts in stores as a matter of convenience and to save return shipping. Single-item returns, especially open-box items, create unsalable inventory issues and great potential for price markdowns. Retailers must carefully weigh the cost of liquidating unwanted gift returns against any new sales or customer good will generated.

Lyle Bunn (Ph.D. Hon)
BrainTrust

Unwanted or unusable gifts are part of life, but to retailers they are the opportunity to better engage consumers to select a preferred item. Return/exchange policy is the key followed closely by how the exchange attempt is handled by in-store staff. If satisfaction is the desired outcome, policies and staff behavior will reflect this and the brand can make positive advances. In addressing an NRF audience, retail entrepreneur Richard Branson noted that “everything must enhance the brand and, also, not take from it.”

Anne Howe
BrainTrust

I love, love, love the Skittles Pawn Shop idea and the Burger King exchange a gift for a Whopper. Clever thinking with the gifts donated to charity is a win, win, win. And the third win is because it give people a story to tell. I would love to see more brands get clever and bold enough to get on board this train!

Dr. Stephen Needel
BrainTrust

I’m not sure retailers should be doing much more than accepting back products they carry. I would think this is why eBay, consignment shops and charities exist.

Ryan Mathews
BrainTrust

So, let me see … YouGov found that 68 percent of folks think re-gifting is acceptable, so where is this major opportunity? And, if I’m reading these numbers correctly, people are more likely to hang on to expensive items — jewelry, electronics, etc. — than they are to the latest Stephen King novel. So do you really want to spend lots of time trying to recapitalize the lame gift market? I’m sure there may be some kind of opportunity here, but I’m equally sure it shouldn’t be anyone’s first, second, third or fifty-seventh priority.

Ed Rosenbaum
BrainTrust

I am having a problem finding a retailing market for unwanted gifts. Where is the market? It is certainly not going to be a brick-and-mortar location where there is rent and lights to be paid. So if it is online, isn’t that what eBay is made for? Let’s take these unwanted gifts back to the place they were purchased and exchange them for something more usable. We don’t need another consignment store.

Tony Orlando
BrainTrust

Hey I’ll pay 10 cents on the dollar for this stuff and resell it for 75 percent off, and double my money. Other than that forget it.

Peter Greene
Guest

Retailers should look at every return as a marketing opportunity. Research will show that a retailer’s best customers make the most returns to their stores. It will also show that they will leave the store 85 percent to 90 percent of the time after making a return and taking their money with them. Why wouldn’t you want to engage with them and find a way to entice them to stay and spend that money?

One proven way of doing this is by taking a “negative” experience, the return, and turning it into a “positive” experience by providing customized intelligent incentives for their best customers. This provides the retailer with an opportunity to engage with consumers to drive incremental purchases after the return as well as build loyalty.

wpDiscuz
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