The rise of returns culture

The rise of returns culture

After weeks of preparation, shopping and gift-wrapping, Christmas is done and dusted. Now we’re firmly into returns season, which means delivery services and shops are brimming over with unwanted gifts. So if you’re planning on returning an unwanted gift,  you’re far from alone. 


Research by The Post Office found that Christmas gifts worth £232 million were returned across the UK in early 2023, with an average value per gift of £74. According to Rebound, a company that analyses millions of transactions for retailers, 1 in 3 fashion items purchased online are sent back. The IMRG's Retail Advisory Board has found the average e-commerce business has seen a 15% return rate this year alone.


This situation may not seem like a big deal, but it belies a much bigger problem for all of us. The average return costs a retailer £20 per parcel due to shipping, warehousing and repackaging costs, which means the returns process costs around £7 billion a year


If you don't think this affects us as shoppers, think again. From the cost to the environment to the rising cost of clothes, returns are turning into an issue that we can no longer ignore. 


Why returns are on the rise


Retailers have made it so convenient to return items that we’ve come to take it for granted. Generous return policies, plus free delivery when you spend over a certain amount, make it tempting to order things ‘just to see’ – knowing we can pack up unwanted items to send back free of charge.. 


Consumer online shopping legislation is also on our side. When we buy goods online, we have additional rights compared to purchasing in-store. This means items bought online can be returned for any reason, and retailers have to give you a refund – so it’s a win-win for shoppers to order and return as many items as they want.


Return culture is now so big in the UK that an organisation is dedicated to studying it. The Product Returns Research Group (PRRG) at the University of Southampton has found that not only are returns seriously impacting retailers' profits, but these costs are also being passed on to the consumer.


The environmental impact of returns


We can’t overlook the environmental impact of returns. Even if the clothes and items you send back aren't thrown away, reselling is costly for the environment. Firstly, clothes are wrapped in paper and a plastic bag that needs to be replaced, and if something is damaged in transit, it needs to be fixed.


The end of free returns


One solution to limiting the impact of returns on the environment and retailers is the demise of free returns. 


Retailers know that free returns motivate people to order more than they need. As a result, big-name fashion retailers, including Next, Uniqlo Boohoo and Zara, have all scrapped free online returns. Others like H&M, the second largest fashion retailer in the world after Zara, are planning to roll out a returns fee (currently in a trial phase in Norway) after the number of refunds rose by 30%. They’re not alone: research from parcelLab reveals that a quarter of 200 leading online retailers are now charging shoppers to return items in the UK.


The truth about returns and landfill


Thankfully, it's a myth that huge companies like Amazon and ASOS throw all their returns away. Amazon doesn’t send any items to landfills in the UK. Their priority is to resell, recycle or donate any unsold products to charitable organisations.


Returned goods that are not fit to be resold as new go through further detailed inspection and are resold as used through Amazon Warehouse or donated to Kind Direct, a national charity that manages the donation of surplus products to charities nationwide.


Asos says 97% of its returned products are resold on the site after inspection and, if needed, repair and cleaning. It also says that it's clear that any returned clothes sold to third parties have strict requirements on what can and can't be done with them. Plus, it only sends products to landfills or destroys them if legally required to.


The increased energy for additional shipments, deliveries, and packaging also causes environmental issues. And then there’s the number of products that end up in landfills because they can’t be sold again. Around £42 million worth of unwanted Christmas presents are sent to UK landfill each year, and

according to the British Fashion Council, ​​UK clothing returns generated 750,000 tonnes of CO2 emissions in 2022, when some 23 million garments were disposed of, around 75% of total returns.


Worldwide, some 59,000 tonnes of clothing arrive each year in northern Chile headed for the Atacama desert, which has become a dumping ground for tonnes of unsold clothes, many of which come from Europe and aren’t biodegradable.


The future of returns


The good news is there are several ways we can all tackle the growing returns mountain. Research from the Product Returns Research Group (PRRG) found that if customers are shown how returns affect the environment, they tend to make more considered purchases.


On the retailer's side, there are attempts by many brands to make sizing guides and product imagery more accurate so that customers are happier with their purchases.


Other brands are introducing AI and virtual try-ons. Artificial Intelligence allows online shoppers to try clothes in a computer-generated fitting room. And virtual try-ons enable customers to try on products virtually, allowing them to see how a product looks before making a purchase. 


Virtual try-on software has been shown to reduce returns for luxury fashion retailers using it in-store. A study found an average of 64% fewer returns with virtual try-ons, with one huge US department store crediting the feature for helping bring its return rate down to under 2%. 


Outside of tech advances, some retailers aim to prevent high returns by letting customers keep an item if the cost of returning it is higher. 


Companies like Amazon also often offer an instant refund (and no recovery) to an Amazon account to limit the expense and to ensure that you, the customer, return to buy again.
Written by Anita Naik Published Jan 3, 2024 ● 4 mins