The customer orders multiple items, many of which can be returned. Credit: Maridav/Shutterstock
Fashion has a notorious environmental footprint, accounting for up to 10% of global carbon dioxide production. This is exacerbated by a fast-fashion business model that encourages the frequent purchase of low-priced, non-durable items.
About 30% of online purchases are subsequently returned, much of which ends up in landfills. In 2020, an estimated 2.6 million tons of returns were disposed of this way in the US alone. The problem has become so notorious that online retailer Boohoo recently followed several major brands in starting to charge for returns. to discourage them.
But what are the reasons for high returns and why are many returned items not resold?
The pandemic fundamentally changed the way we shop, and the temporary closure of physical stores represented a boon for online retailers. However, the growing market share of online retailing has its roots in long-standing fast fashion marketing practices. The premium placed on novelty, low prices, and both free delivery and free returns encourage customers to shop multiple options with the knowledge that they can freely return items (known as “in brackets”).
Buy now, pay later schemes like Klarna, which allow customers to place orders without paying up front, have accelerated online consumption. Research indicates that by offering such “payment solutions,” retailers will typically see a 68% increase in average order value.
Industry research suggests that cart abandonment rates drop by almost 40% after the introduction of payment solutions. Discount events like “Black Friday” also drive sales, with fashion accounting for about a third of all Black Friday spending.
Fast fashion is synonymous with returns
Despite the lure of low prices and discounts, cheaply made fast fashion items often have quality and fit issues, leading to returns. Impulsive spending, fueled by discounts, also often leads to regret, again increasing the incidence of return. Thus, the 32% return rate for apparel orders dwarfs that of other e-commerce sectors, compared to just 7% for consumer electronics.
For retailers, returns processing is also fraught with uncertainty and complexity. It is unknown which items will be returned and in what condition. Often, once worn, little can be done to make them desirable for repurchase.
This is particularly true of “wardrobe”, where a purchased item is worn once before being returned. Not only do retailers face financial loss through rework, they risk losing their reputation if worn or damaged items are recirculated.
ASOS previously announced that it would clamp down on “locker room” by closing the accounts of those who return fraudulent items. However, the threat of a bad review often leaves the retailer with little choice but to refund.
Instead, many retailers sell these profits to liquidators, who turn obsolete products into quick cash. A quick look at eBay reveals dozens of “Amazon customer returns” pallets available to the highest bidder.
The fashion industry produces more than 92 million tons of textile waste per year. Credit: vchal/Shutterstock
The challenges facing retailers
Both the cost of processing returns and their increased volume present a challenge to retailers. The substantial reprocessing costs involved in product returns mean that, for fast fashion items, they often outweigh potential resale revenue. The comparatively high-cost compensation of domestic workers within labor-intensive returns reprocessing is widely held to be responsible for this.
Therefore, getting rid of returns is often the most profitable decision. An ITV investigation into Amazon’s Dunfermline warehouse claimed the online retailer disposed of tens of thousands of returned consumer goods each week. Amazon said none of its items went to landfill, but instead were donated, recycled or incinerated for energy recovery.
The fashion industry collectively produces more than 92 million tons of textile waste per year. In the US alone, clothing returns create more annual carbon dioxide emissions than 3 million cars.
Carbon dioxide is initially emitted through return collection, before increasing as returns are incinerated or landfilled. Due to the prevalence of synthetic fibers in fast fashion, returns can take up to 100 years to fully break down, emitting carbon dioxide and methane in the process, as well as leaching harmful substances into the surrounding soil.
How do retailers deal with the issue of returns?
While the environmental implications of product returns are clear, fashion retailers also have a financial incentive to address the issue of costly returns management.
Due to the complexities surrounding reprocessing, fashion retailers are increasingly outsourcing responsibility to specialized 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 its ReBound Regift facility. So far this has facilitated £190m worth of charitable donations. ASOS claims that 97% of its returns are now resold and no items are sent to landfill.
As Boohoo’s recent move shows, several online retailers have attempted to pass the cost of returns onto customers. While the reason for this is primarily financial, the impact of similar policies on improving customers’ environmental awareness is well known. Since 2015, the use of plastic bags has been reduced by 97% in the main supermarkets in England, after the introduction of a small charge.
Despite calls for more sustainability within the fashion industry, fast fashion continues to flourish. If marketing practices that encourage waste and fuel emissions persist, the fashion industry will retain its unwelcome reputation as a significant contributor to climate change. Retailers need to reconsider the unintended effects of leniency afforded by their return policies, balancing the need for customer retention with environmental awareness.
Why Customer Returns Are Losing Businesses Provided By The Conversation
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Citation: Fast Fashion: Why Your Online Returns May End Up in Landfills and What Can Be Done About It (Aug 4, 2022) Retrieved Aug 20, 2022 at https://phys.org/news/2022-08- fast-fashion-online-landfill.html
This document is subject to copyright. Other than any fair dealing for private study or research purposes, no part may be reproduced without written permission. The content is provided for informational purposes only.
Source: phys.org