United Parcel Service, Inc. (NYSE: UPS) has seen a record number of returns this holiday season as the amount of online shopping continues to reach new heights. UPS said on Wednesday the increasing rates of online shopping are expected to increase the amount of returned packages to a record following this year’s holiday shipping season, handling more than one million returns to retailers daily in December. Return rates are expected to reach 1.4 million on January 3, an eight percent increase from the previous year, making it the fifth consecutive annual record.
The returns follow what could be a record high for online shopping this holiday season. Mastercard Inc (NYSE: MA) reported that shoppers spent over $800 billion during the holiday season alone, more than ever before.
Online retailers such as Amazon pay package delivery companies such as FedEx and UPS for handling online purchase deliveries. Although package delivery companies have benefited from the expanding volumes of deliveries, they have also spent ample amounts of money in expanding their networks to cope with these increasing rates of purchases and deliveries.
FedEx said on Wednesday that it had another record-breaking peak for the holiday season as well. Rajesh Subramaniam, chief marketing officer of FedEx, said about 15 percent of all goods purchased online are returned, with apparel running at about 30 percent in the last week.