KING OF PRUSSIA, PA — New insights from Vertex Inc. (NASDAQ: VERX) underline the significant tax complexities retailers face in managing post-holiday returns. The rise of “Returnuary” season, spanning from late December through early February, has brought fresh challenges to retailers as they work to meet consumer expectations for seamless, free product returns while navigating intricate tax compliance requirements.
Survey data from Vertex shows that 81% of consumers would rather keep an unwanted item or visit a nearby store to return it than pay for return shipping. Additionally, 68% of shoppers say their return experience directly influences their decision to engage with a brand again. This growing consumer demand for effortless and cost-free returns underscores the pressure on retailers to provide high-quality service, even during peak return periods.
Retailers, however, face difficulties ensuring compliance with tax regulations. They must accurately refund sales tax collected at the time of purchase, which is challenging due to varying tax laws across jurisdictions and sales channels. Managing this influx of returns becomes even more complex when retailers rely on disconnected systems prone to errors and compliance risks.
“Retailers have little time to recover between the holiday shopping surge and the post-peak return influx, making it crucial to avoid discovering the wrong tax configuration at this critical moment,” said Sal Visca, Chief Technology Officer of Vertex Inc. “Adopting an integrated, modern, and unified tax approach ahead of these major retail moments is critical to reducing complexities, accurately tracking taxes, and meeting business and consumer needs.”
The survey revealed that nearly 40% of consumers return at least one item during the post-holiday period, often valued between $25 and $100, with 55% ensuring the sales tax is refunded. Omnichannel commerce adds layers of complexity, as 77% of holiday transactions occur online but 60% of returns are processed in-store. Retailers must also account for time-sensitive factors, such as tax rate changes that occur between the original purchase and the return date, requiring them to maintain accurate historical rate data.
Adding to retailer challenges, 35% of consumers admitted to buying products with the intent of returning some items. This consumer behavior widens the operational and tax compliance challenges retailers must address to deliver a smooth return process while maintaining accuracy in indirect tax calculations.
Vertex’s survey, conducted through Dynata in February 2025, polled 1,000 U.S.-based consumers aged 18 and older, providing valuable insights into shifting consumer expectations and the need for innovative tax solutions.
The findings highlight the critical importance of automated tax determination systems to help retailers confidently manage the complexities of processing returns, ensuring accurate refunds, and maintaining compliance during high-pressure periods.
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