By Al Gerrie CEO of ZigZag Global
The rise of online shopping has revolutionised the way we purchase items. With just a few clicks, consumers can browse thousands of products and make purchases without leaving the comfort of their own home. The ease with which consumers can make purchases has been met with the expectation that returns should be free of charge and for years, this has been the case. However, with the environmental impact increasing in importance to more discerning consumers, free returns will soon become a thing of the past.
23 million returned garments were sent to landfill or incinerated in the UK last year according to a recently released report from the British Fashion Council. This represents 75% of the approximate 3% of all returns that cannot be resold, and generated 750,000 tonnes of CO₂ emissions. It’s a clear indication that the current system of free returns is not sustainable and is a major issue for an industry responsible for 10% of annual CO₂ emissions worldwide.
For years, retailers have offered free returns as a way to entice consumers to make purchases. This policy has been successful in increasing sales, but it has contributed to a culture of overconsumption and waste. Consumers have become accustomed to buying items with the intention of returning them, often ordering multiple sizes or colours of the same item with the intention of only keeping one, a process known in the returns space as ‘wardrobing’. We know that almost half of UK shoppers (47%) consider themselves a ‘regular returner’ – rising to 67% amongst 18-25-year-olds – an indicator of the culture of overconsumption.
Aside from the evident environmental concerns, free returns also have a significant financial impact on retailers. The cost of processing returns, restocking items, and reselling is a double whammy, eating into retailers’ profit margins and resulting in higher prices for consumers.
It’s time for retailers to take responsibility for their role in the returns problem.
Rather than offering free returns as a standard policy, should retailers consider implementing a small fee to consumers looking to make a return, following the precedent set by Boohoo and Zara in 2022? This would encourage consumers to be more thoughtful about their purchases and discourage the culture of overconsumption.
The British Fashion Council’s report also highlights the importance of investment in reverse logistics solutions. Making the returns operations more efficient through data insight and automation is key to making the industry less carbon-intensive, keeping items in the circular economy away from landfills. At ZigZag, we analyse the data from past returns, helping retailers to identify patterns, common reasons for returns, and areas where improvements can be made. This means proactive measures can be taken to address common issues and reduce the frequency of returns.
One retailer we tested with recently saw a 25% drop in returns but no loss in sales by switching on paid returns. This being said, it’s not just about charging for returns or using data insights. Retailers also need to take a more proactive approach to reducing waste. This could include offering more detailed product descriptions and sizing information to help consumers make more informed decisions, improving the quality of products to reduce the likelihood of returns, and investing in sustainable packaging materials to reduce waste.
By taking these steps, retailers can improve their bottom line whilst simultaneously reducing the environmental impact of returns. Consumers are becoming increasingly aware of the impact of their purchasing decisions and are more likely to support companies that prioritise sustainability.
Charging for returns may not be feasible for all retailers. Smaller companies with limited resources may struggle to implement a paid returns policy. But this does not mean they should ignore the issue altogether. Other steps can be taken to reduce waste, such as partnering with charities or recycling organisations to ensure returned items are repurposed rather than sent to landfill.
It’s important to remember that the issue of returns is not just about the environment or financial sustainability. It’s also an ethical issue. Retailers have a responsibility to their organisations, consumers, and the planet. By prioritising sustainability and taking a more proactive approach to reduce waste, they can demonstrate their commitment to these values.
The current system of free returns is not sustainable, and something needs to change. Retailers can take responsibility for their role in returns by implementing a policy of paid returns and taking a more proactive approach to reducing waste. By doing so, they can improve their bottom line whilst demonstrating a commitment to net zero targets and more ethical values.