The real cost of free returns

Free returns became a standard for e-commerce business. 

Most of the online shoppers say that return shipping fees are likely to stop them from making a purchase. After all, we are in the Amazon era.
It sounds fair that companies are the ones paying the price for returns. 

But there is an even bigger cost we are ignoring, and our environment is paying its price.

Returns have three different drawbacks that we often ignore!

1- Many returned products turn into waste. 

Almost 40% of the returned items do not go back to the shelf and risk ending up in landfills. 
We return products thinking that they will go straight back to the store, but this is often not the case.

  • At times, the law does not allow companies to sell returned items. One reason, for example, is hygiene (there is no way a returned pair of underwear is going back to the market).
  • Sometimes it is cheaper to trash the returned products rather than selling them again. This is the case especially for items that are seasonal or have low production costs.
  • In other cases, the items can get damaged during the return process.
    Especially considering that we do not always create the best possible conditions for the items to remain intact when returning them. 

2- Packaging Waste

Think about that ridiculous box you received where the plastic occupied more space than the product. That happens far too often. Now think about the fact that billions of packages are shipped every year!

Even when the company shipping goes the extra mile to minimize the waste, the packaging might not be disposed of correctly.

In the case of returns, it is ideal to reuse the same packaging. 
In a less optimal scenario, we would at least recycle the box. But even when that happens, “25 to 30 percent of the materials picked up by a recycling truck are too contaminated to go anywhere but a landfill or incinerator” (According to what Richard Coupland said at The Verge).

3- Transportation Pollution

The transportation of products for sure has an important impact on greenhouse gas emissions, even though it is very hard to calculate. 

Shipping is often better than having someone driving to the store to pick up a product. The problems arise when the frequency of the shipping is so high that couriers cannot properly group the orders and when the amount of returns is very high.
One-day shipping is impressive, but its logistics do not make it an environmentally friendly solution.

Each means of transportation has different aspects to pay attention to.
Ships, for example, transport 90% of the world’s products but they are one of the least efficient means of transportation.

But, when we are talking about returns, we are more likely talking about trucks. 
In this case, other than greenhouse gas emissions, we should also take into consideration traffic congestion and the fact that pollution is happening next to our doorsteps. 

If we want to quantify, we can estimate that road transport for returned fashion items alone is responsible for the emission of 6.4 million metric tons of CO2 every year.  Numbers that compare to the ones of a country like Uruguay.

Returns in the fashion industry

It’s particularly interesting to look at the fashion industry, where online returns reach an insane rate. About 40 to 50% of ordered items are returned.

Almost half of the online shoppers say they ordered multiple pieces already knowing they would return at least one of them. 

It became common practice to order two different sizes of the same article with the objective of sending back the one that fits worst. As research from Navar puts it: the bedroom is the new fitting room.

A growing trend

Return policies kept getting looser over time. Online purchases are two times more likely to be returned compared to in-store purchases.

This difference remains consistent throughout most of the industries and product categories. We can then assume that these rates are not caused by dissatisfaction with the product’s performance. The underwhelming performances of our new computer, for example, or the weak battery life of the new phone. We never know the product until we use it for several days, whether we bought it online or not. 

What drives returns seems to be simply the fact that it is an option we have. 
An easy option that does not require us to do much work. Magically, someone will pick up the package at our doorstep and give us some money back.

This phenomenon is also noticeably reducing the earnings of many online brands, but free returns are so established that any company is scared to abandon this policy. We reached a point where brands would rather add the return cost directly in the final price of the products. 

Today, restrictive return policies stop customers from buying. A significant portion of respondents to Navar’s research says that restocking fees or return shipping fees will prevent them from buying. 
On the other hand, 72% of respondents said that a “no questions asked” return policy would make them more likely to buy. 

Also, while this keeps being a big problem for large corporations, it is an even bigger problem for smaller brands. Sustainable brands already tend to have lower margins; free returns can be a dealbreaker for their business but they feel forced to tag along. 

So, what can we do now?

The first advice is pretty straight forward: do not buy something unless you really need it. 

But, here are some suggestions for when you actually need to buy something:

  • If you bought something that does not fit you, or that you do not need anymore, give it to someone that needs it, or re-sell it with a discount. It is a nice gesture and it will be appreciated for sure!
  • If you really need to return something, try to see if it is possible to return it personally to a store near you.
  • Read reviews before you buy. Often you will be able to find important indicators that will help you in your buying decision.
  • Use software that suggests the perfect size for you! (Especially fashion brands tend to have a system like this integrated into their online shop)

Well, we did it again…

Free returns are great service, especially for the consumers but, as always, we managed to take something and bring its bad side to the extreme.
An extreme that does not appear to be sustainable for much longer.

In the end, it’s up to us…

Awareness is needed so that we take less unnecessary advantage of the convenience factor. Buy more consciously: better products, less often – and research well enough before you order so you don’t have to return. 

By reducing our consumption, and not giving into the easiest path, we can generate a positive impact together.