There's No Such Thing as Free Returns – Here's the Solution
We’ve all been there. You’re lost in the office afternoon slump as you find yourself perusing the latest additions to your favorite fashion website. You bite your nail as you’re trying to decide whether that red dress could work well with your black boots or if the fabric would cling weirdly to your body. Maybe your week is too packed to pay a visit to the shopping center downtown, maybe you can’t find this brand anywhere near you, or maybe the stores are closed due to Covid-19 regulations.
Either way, you can’t try it on, even though, you wish you could before they part away with your hard-earned money. And just when you are about to postpone the purchase you see it: the magical ‘Free Returns’ banner at the top of the page. You feel a sense of relief coming through you. Before you know it, you’re inserting your credit card information. The worries are gone, because if it doesn’t fit, you can always return it.
A long-standing epidemic, difficult to ignore
Returns have been called the epidemic of the fashion industry long before that word was the center-piece of every dinner conversation. On paper, it seems like a win-win situation. Consumers can enjoy an online shopping experience without worrying about picking the wrong size or committing to garments they’ve only seen in photos. Retailers can profit from lower entry barriers for consumers, which enables impulse buying and often being too lazy to return the item. So, what’s the issue with returns? Let’s take a look.
Free Returns are Costly for the Environment
The environmental impact of the fashion industry has been discussed over and over, and it’s clear now that is not a good one. Free returns only add to the general waste of the industry, by enabling impulse buying and adding to the CO2 account with their boomerang shipping.
There’s also the the landfill issue. Optoro, a company focusing on returns logistics, affirms that 5 billion pounds of waste are generated through returns each year, contributing to 15 million metric tons of carbon dioxide in the atmosphere. This is because making sure products are up to standard once returned can be extremely expensive. Companies don’t have the technology to automatically check the state of a return – whether it’s been worn, it’s faulty, dirty, and so on – which means most of them to have to do it manually. Additionally, the cost of sanitizing and the logistics of getting the product back in stock often exceed the value of the product itself, especially when we’re talking about £15 fast-fashion dresses.
The dark truth seems to be that every time you’re returning an item, you might just be dumping it in the landfill.
Free Returns are Costly for Retailers
Returns are such a crucial part of the online shopping experience that it seems ridiculous to think retailers are not making money off it. In 2019, Accenture revealed that top returners are often the most profitable customers, with the top 5% of returners being 30% more profitable. However, Optoro claims that retailers make hardly any money on returned items, and with only 50% of returns going back in the store inventory, it seems plausible.
So why are the deadlines for returns getting pushed back and pushed back? It’s a vicious cycle. Consumers get used to crazy offerings that end up becoming industry standards. It used to be 30 days free returns, then it became free, now it’s up to 90 days.
How to solve the return problem?
How can you change a damaging trend and turn around a whole industry? We spoke with Professor Esben Pedersen, Coordinator of the Sustainable Business Minor at Copenhagen Business School. “The whole return thing is very interesting to look at for online markets,” he tells us. “It creates an enormous amount of waste, in terms of sustainability and for the company. It’s a huge volume that they have to handle, the whole system could benefit from a system where you can create more value and make sure consumers don’t return as much.” But this is easier said than done.
Firstly, it’s important to understand why customers return so much clothing. The issue seems to be standard sizing that has generally been accepted by the industry. While our grandparents used to have clothes made for them from scratch, we are often boxed into small, medium, or large. “All these standard volumes don’t really fit anybody. It is one of the reasons why consumers return so much – you cannot trust the sizes,” reports professor Pedersen.
Technology that makes it easier to find the perfect fit
The sizing issue is quite apparent in the industry, and many have already seen the economic potential of this gap. New companies are popping up left right and center, with the common mission of reducing returns. Nicole Levitt, VP Marketing at Sizer, tells us: “With 40% of all online clothing purchases returned usually due to incorrect sizes, retailers are trying to adopt solutions to try to reduce this costly headache.”
The Sizer app allows shoppers to use their smartphone camera to measure their body and then provides highly accurate size recommendations for each item selected. “We take the guessing and frustration out of clothing size and ensure every person gets the best fit the first time around”, Levitt continues.
Easysize Marketing Manager Vitika Jain adds: “These free returns not only cause a strain in the company’s profitability, but also have a drastic effect on the environment due to wastage of materials and unnecessary emission of CO2. Worldwide, approximately 17 billion items are being returned every year. This totals to 4.7 million metric tons of CO2 emitted yearly, and if we are able to decrease that figure by just 10%, it would be the equivalent of the power used by 57.000 US homes for an entire year.” Easysize helps online-shoppers find the right size by answering a few simple questions, in less than 10-15 seconds. Contrary to the industry standards, they don’t ask customers to measure themselves, which some companies believe could be a deterrent to making the purchase. “This helps brands to build trust in their shoppers, buy right, return less, and hence, be more sustainable.”
The cure: Back to Basics
Companies that have implemented solutions like Sizer and Easysize managed to reduce their returns up to 60%, saving a substantial amount of money, time, and CO2. At the moment, the best way to be an efficient online business is to return to made-to-measure clothes. Once again, the way forward seems to be going back.