why your online returns could end up in landfill – and what you can do about it

Fashion has a notoriously gigantic impact on the environment, accounting for as much as 10% global carbon dioxide emissions. The situation is made worse by the speedy fashion business model, which encourages repeated purchases of inexpensive and perishable items.

Around 30% online purchases are then returned, most of which ends up in landfill. In 2020, an estimated 2.6 million tons returns were disposed of in this way in the US alone. The problem has become so notorious that online retailer Boohoo recently followed the lead of several high street brands and began Returns fee to discourage them.

But what are the reasons for such high returns and why are many returned items not resold?

The pandemic has fundamentally changed the way we shop, and the momentary closure of brick-and-mortar stores has been a boon for online retailers. But the growing market share of online retail has its roots in long-standing fast-fashion marketing practices. The premium on novelty, low prices, and free shipping and returns encourages customers to shop for a variety of options with the knowledge that they can freely return items (known as “in brackets”).

Buy now, pay later programs such as Clarathat allow customers to order without having to pay up front, have accelerated online consumption. Research suggests that by offering such “payment solutions,” retailers will typically see 68% increase in average order value.

Industry research suggests that cart abandonment rates drop by almost 40% after introducing payment solutions. Discount events such as “Black Friday” also drive sales, with fashion accounting for about one third all expenses on Black Friday.

Quick fashion is synonymous with returns

Despite the appeal of low prices and discounts, cheaply produced speedy fashion items can often have quality and fit issues, so they are synonymous with returns. Impulsive spending, fueled by discounts, often leads to regretagain increasing the return rate. 32% return rate For apparel orders, this percentage dwarfs other e-commerce sectors, while for consumer electronics the percentage is just 7%.

For retailers, processing returns is also fraught with uncertainty and complexity. It is unclear which items will be returned and in what condition. Often, once used, there is little that can be done to make them desirable for repurchase.

This is especially true in the case of “wardrobe”, where the purchased item is worn once before being returned. Not only do retailers suffer financial losses from reprocessing, but they also risk spoilage reputation if worn or damaged items are put back into service.

ASOS has previously announced plans to crack down on “wardrobing” by closing down accounts of fraudulent returners. However, the threat of a bad review often leaves the retailer with small option but to be returned.

Many retailers instead sell those returns to liquidators, who turn obsolete goods into quick cash. A cursory look at eBay reveals dozens of pallets of “Amazon customer returns” available to the highest bidder.

Challenges facing retailers

Both the cost of processing returns and their increased volume pose challenges for retailers. The significant reprocessing costs associated with product returns mean that, in the case of speedy fashion items, they often exceed potential resale revenues. Paying relatively steep domestic workers for the labor-intensive reprocessing of returns is widely believed to be responsible for this.

Getting rid of returns is often the most cost-effective decision. ITV investigation to an Amazon warehouse in Dunfermline claimed that the online retailer was getting rid of tens of thousands of returned consumer goods every week. Amazon said none of its items went to landfill but were donated, recycled or incinerated for energy recovery.

The fashion industry collectively produces over 92 million tons textile waste per year. In the USA alone, clothing is returned create more carbon dioxide emissions per year than 3 million cars.

Carbon dioxide is initially emitted by collecting returns and then increases when returns are incinerated or landfilled. Due to the prevalence of synthetic fibers in speedy fashion, returns can take up up to 100 years they decompose completely, emitting carbon dioxide and methane in the process, and leaching harmful substances into the surrounding soil.

How do retailers handle returns?

While the environmental impact of product returns is obvious, apparel retailers also have a financial incentive to address the issue of costly returns management.

Due to the complexity of the reprocessing process, fashion retailers are increasingly outsourcing this responsibility to specialist companies such as ReBound Returns, who work with retailers to make the returns process more sustainable.

ReBound encourages retailers to donate returned consumer goods to charity through their ReBound Regift facility. To date, this has enabled charitable donations worth 190 million pounds.ASOS States that 97% of their returns are now resold and no items go to landfill.

As Boohoo’s latest move illustrates, several online retailers have tried to pass on the cost of returns to customers. While this is largely for financial reasons, the impact of such policies on improving customers’ environmental awareness is well-known. Since 2015, plastic bag exploit dropped by 97% in major supermarkets in England, following the introduction of a petite charge.

Despite calls for greater sustainability in the fashion industry, speedy fashion continues to thrive. If marketing practices that encourage waste and fuel emissions continue, the fashion industry will retain its unwelcome reputation as a significant contributor to climate change. Retailers need to reconsider the unintended consequences of the leniency offered by their returns policies, balancing the need for customer retention with environmental awareness.