Nov 13, 2008

Retailers Feel Pinch of ReturnsBy Ruth La FerlaNYTimes.com

Shopping at Nordstrom in Miami this month, Maria Kakouris indulged herself with a $200 pair of satin-and-snakeskin pumps. Then came a spasm of buyer’s remorse. “Those shoes — they are still in my car with the receipt,” said Ms. Kakouris, a real estate agent. “I’m thinking, where am I going to wear them?”

In less challenging times, Ms. Kakouris might have hung onto the shoes. But now she is more circumspect. “They’re going right back where they came from,” she said.

In giving up her splurge, Ms. Kakouris joined a steeply rising number of shoppers who, driven by anxiety over jobs and savings, or an immediate need for cash, are marching back to stores with their purchases.

Consumers are expected to return a record $219 billion of merchandise this year, or 8.7 percent of total sales, compared with 7.3 percent in 2007, according to a survey released Thursday by the National Retail Federation.

Joseph LaRocca, a vice president of the retailing group, said that returns of the holiday purchases that many stores rely on to lift them into profitability for the year are expected to be especially high. It is one more measure of the calamity that many retailers are facing as consumers snap shut their wallets.

“Consumers are trading down massively; they are out of money, and that’s where returns come in,” said Howard Davidowitz, chairman of Davidowitz & Associates, a retailing consulting and investment banking firm. “When times are terrible, they look for ways to cut back.”

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