Managing Sales Tax Complexities in Merchandise Returns

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As the world has become increasingly digital, the retail industry has gone through tremendous transformation. To survive in the competitive landscape and keep up with evolving customer preferences, merchants have had to adapt and learn how to deliver the seamless omnichannel experience that shoppers expect. Delivering that efficiency and convenience comes with operational intricacies that no longer can be managed manually.

Customers expect an easy return process, and they use it to their advantage. There are many shoppers who buy items in multiple sizes and options for comparison. In fact, 40 percent of shoppers bought multiple items online in 2017 with the intent to return all but their favorite, according to customer loyalty company Narvar.

While most shoppers might see returns as convenient and hassle-free, the process is costly and complex for retailers. From restocking and labor costs to the inability to resell a returned item because it either is no longer in style, or was damaged, or went on sale, retailers face a myriad of return challenges that expand beyond a lost sale.

The increase of returns is proportional to the expansion of online sales, which have experienced a growth rate nearly three times that of rate of brick-and-mortar