26/11/18 The True Cost of Free Online Returns

We’ve all done it. You see something you like but you’re not 100% sure about the colour or fit. So you intentionally buy the same item in several different shades and a couple of different sizes because you don’t know what you really want. You over-order, try things on at home (or at work) and send what doesn’t work back. That’s okay though, since it’s free shipping and free returns, you’re covered and no harm done, right? Wrong.

Back in July of this year, Aparna Mehta, a Global Supply Chain Innovations expert at UPS who works with big retail companies to develop innovative and profitable solutions that enhance customer experiences (and the bottom line), delivered an enlightening Ted Talk where she discussed how she too used to operate in this way, constantly buying and returning, until one day she asked herself: Where do all these returned clothes go?

As Aparna revealed, the unseen world of “free” online fashion returns is not as clear-cut as one would like to believe. In fact, instead of ending up back on the shelf, many returns are actually sent to landfills.

To be specific, it’s now more like five billion pounds of returned clothing ends up in landfills every year. Mind-boggling and as Aparna highlights, it is the equivalent of every resident in the U.S. doing a load of laundry last night and then deciding to throw it in the trash today.

How did this happen?

Initially, it was thought that by offering free online returns it would drive customers to spend more, thus more and more companies began offering free returns to drive more sales, while providing a better user experience. But they didn’t realise that the upshot to this would be an increase in more items being returned as well, which as a result now accounts for millions of dollars worth of losses in sales. (In 2017, in the U.S. companies lost $351 billion in sales alone).

Free shipping and returns have made it so easy to buy, try, return, and then buy again. However, the reality of this is that only close to half of all returned merchandise can be resold, with the rest distributed to a variety of locations, according to Optoro, a reverse logistics company. But of all that, 5 billion pounds goes directly into the garbage.



Image courtesy: simplerecycling.com

For retailers to recoup these losses, they employ multiple tactics: including trying to place the item back online to be resold, try to sell to a discount partner or even to a liquidator. But if none of these options work and companies cannot find a place for the item quickly and economically, it is sent to the trash.

What might seem like an innocent click and collect and return, can in reality end up contributing to an enormous cycle of waste and environmental destruction.

What’s the solution? After learning of this, Aparna began strategising solutions in order for companies to innovative in order to reduce such blatant waste. While this is positive and hopefully will become incorporated into global retailers online returns models, it by no means will be a quick fix.

Nevertheless, as Aparna also notes, we as shoppers can actually act now. All it takes is making a few small changes to our shopping habits by taking the extra time to research and think about our purchases: Do we really need this dress? Do we really want this top? Think about this before filling your shopping carts and making your next online purchase. This would dramatically reduce the online returns rate and keep millions of pounds of clothing out of landfills. It’s that simple.

If you approach online shopping in the right way, the returns scenario is easy to avoid. As well as taking the time to consider whether you really want that specific item, sizing also plays a part. It’s easy to ignore the small Size & Fit tab below the product description on most sites, but there’s a lot you can learn from it. Not only is there information about whether or not the item runs true to size, but there is usually detailed information on how it’s cut everywhere from the bust to the waist and hips. If you know your measurements, this is great, but even if you don’t, compare the information to an item already in your wardrobe.

Also, think about how the item has been presented to you. While some sites are particularly good at nailing the styling, you should only use it to inspire an outfit once you’ve decided you like the item on its own. Meaning you should consider how the piece looks separate from the way it’s styled. Be sure to read the product description to discern whether or not styled items such as a belt or camisole are included, since they can really make a difference.

Similarly, pay attention to the fabric. Compare it to something you already own. One of the most important things about clothing is the fabric and often when you like an item that you have, it’s because you like the material. Even if you’re not a fabric expert, you can use this to inform decisions about other pieces, and hopefully reduce the likelihood of wanting to return your online purchase.

Let’s face it, this is not some far away problem. It’s happening right now and the good news is that we can all play a part in solving it. So the next time you go to utter the words or hear someone else use the phrase “you can always return it” when buying a gift or planning their party outfit, think again.

Watch the full Ted Talk below: