Shoppers using ‘hedge spending’ sales tactics

Shoppers are getting the most out of the high street sales by employing a ‘hedge spending’ tactic, where they return items purchased at full price once they find them discounted, research has found.

“This Christmas we have seen an unprecedented level of discounting with retailers extending their promotions over much longer periods,” explains Vicky Brock, chief executive of Clear Returns. “This is causing ‘hedge spending’ behaviours amongst consumers, whereby shoppers buy an item at full price and then wait to see if it features in the post-Christmas sales. They then buy the reduced product and return the full priced item.”

This sales tactic is a “triple hit” for retailers the retail returns specialist claims, which could result in a cash flow problem and cause them to enter negative trading once corporation tax and rents are due, as well as them losing further loss of profits due to only being able to resell the original item at the new, lower price.

The shopping tactic means retails will be experiencing an increase in refunds, with Clear Returns claiming that up to 10 percent of all refunds for the year will be demanded between Boxing Day and late January.

Brock added: “With consumers increasingly buying first and choosing later, returns will become a significant pain point for retailers as unwanted Christmas gifts are sent back.”