New study maps the psychology behind the post-holiday return surge

Global retail e-commerce sales reached an estimated $5.8 trillion in 2023. While this figure represents a booming market, it brings a significant operational headache: product returns. Industry estimates suggest that return rates for online orders are notably higher than those for physical stores.

Retailers face their most intense logistical pressure in January. Following the holiday season, waves of unwanted gifts and impulse purchases flood back into warehouses. This surge creates financial strain through reverse logistics costs and inventory management difficulties.

Despite the industry focus on logistics, less is known about the consumer psychology driving these decisions. A team of researchers recently investigated the mental processes that lead a shopper to send a package back. Their findings were published in the Journal of Retailing and Consumer Services.

Psychology of Selling

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Investigating the Holiday Mindset

Yun Wang from Carleton University, alongside Bo Yu, Jing Chen, and Tausifur Rahman Johan from Dalhousie University, led this investigation. They sought to understand if a “holiday effect” influences the decision to return items. They also wanted to see how pricing interacts with the festive season to change consumer behavior.

The team based their inquiry on two psychological concepts. The first is negative expectation disconfirmation (NED). This occurs when a product fails to meet the standards a consumer imagined before buying it.

The second concept is post-purchase dissonance (PPD). This refers to the discomfort or regret a person feels after a transaction. The researchers divided this into two types: cognitive dissonance, which is doubting the wisdom of the decision, and emotional dissonance, which involves feelings of anxiety or unease.

The central question was how these internal states lead to returns. The researchers also asked if the holiday context changes the way these mental processes unfold. They hypothesized that the festive atmosphere might alter how consumers view prices and product quality.

Designing a Two-Phase Survey

To capture the specific influence of the holiday season, the research team designed a repeated cross-sectional survey. They collected data from two distinct groups of consumers in the United States and Canada via an online platform.

The first group completed the survey in November 2021, prior to the Black Friday sales events. This group represented the pre-holiday baseline. The second group completed the survey in late January 2022, capturing the post-holiday sentiment.

Participants were eligible only if they had made a purchase within the last four to seven weeks that they intended to return. The researchers screened the data to ensure validity, resulting in 498 qualified responses. The sample was split fairly evenly between the pre-holiday and post-holiday groups.

The survey asked participants to describe the product, its price, and their feelings regarding the purchase. The researchers used statistical modeling to measure the strength of the relationships between the consumers’ expectations, their emotional states, and their intention to return the item.

Tracing the Path to a Return

The analysis revealed a specific chain of psychological events. The data showed that when a product failed to meet expectations, it triggered feelings of dissonance. This rise in mental and emotional discomfort then linked directly to a stronger intention to return the product.

The study highlighted that emotional reactions were particularly potent. While cognitive doubts played a role, the consumer’s negative emotions and the gap between expectation and reality were stronger predictors of return intentions.

The researchers then isolated the impact of the holiday season. They found that the holidays did not directly cause an increase in the desire to return goods. Instead, the festive season acted as a buffer.

The Moderating Role of Festivity

During the holiday period, consumers reported lower levels of negative expectation disconfirmation. This suggests that the festive environment may make shoppers more forgiving or less critical of product flaws compared to other times of the year.

The study also found that holidays changed how price influenced behavior. Typically, high prices lead to higher scrutiny and a greater likelihood of returns. However, the data showed that the holiday season softened this relationship.

During the holidays, the link between a high price tag and the intention to return was weaker than in the pre-holiday period. The researchers suggest that the cultural emphasis on generosity and celebration may override the usual financial caution consumers apply to expensive items.

Demographic and Category Influences

The analysis also looked at who was returning items. The results indicated that gender and age were significant factors. Female participants and younger consumers expressed a higher intention to return products compared to their male and older counterparts.

Income and education levels also played a role in the psychological process. Higher education levels were linked to increased emotional dissonance. This suggests that more educated consumers may engage in more post-purchase reflection, leading to greater potential for regret.

Product categories mattered as well. Items like video games were associated with higher levels of missed expectations. This indicates that certain industries face a steeper hill in managing consumer satisfaction.

Implications for Retail Strategy

These findings offer specific insights for business leaders managing e-commerce operations. The strong link between emotional dissonance and returns suggests that retailers should focus on managing feelings, not just logistics. Post-purchase engagement strategies that reassure the customer could help reduce anxiety and prevent returns.

The study also indicates that a one-size-fits-all return policy may be inefficient. Since younger consumers and female consumers show higher return intentions, retailers might tailor their policies or customer service interactions to these segments.

Retailers might also adjust their approach during the holidays. Since consumers are less price-sensitive regarding returns during this time, marketing can focus more on the celebratory aspects of the product. However, the post-holiday period brings a return to standard scrutiny, requiring a shift back to value-focused messaging.

Questions for Future Investigation

This research opens several new avenues for inquiry. The study was conducted in North America, raising the question of whether these psychological patterns hold true in different cultural contexts with different holiday rituals.

Future researchers might also explore how these mechanisms work in emerging retail formats. It remains to be seen if the same psychological buffers exist in social commerce or live-streaming shopping environments.

Finally, the reliance on self-reported intentions suggests a need for behavioral tracking. Future studies could pair survey data with actual transaction logs to see if the stated intentions match the final physical actions of consumers.