Jun 20, 2024
by Karl Smith
Returns: The Problem That Just Keeps Coming Back
by Karl Smith
Jun 20, 2024

There is an idiom in the English language something like, “a bad penny always turns up.” If someone you don’t like keeps on showing up when you’d rather they didn’t, they’re a bad penny, for example. It’s a way of saying that nothing inconvenient, when sent away, ever stays gone for long – and the less you want it back, the more likely it is to reappear.

Returns, then, are the bad penny of the fashion industry; both the offending coin itself and the mechanism by which other terrible, unwanted tender is allowed to reenter circulation just when you thought it was gone.

Now, if you’re puzzled by this, thinking, “Surely it’s better to return an unwanted item than to simply discard it?”, it is fair to say there is some truth to that; to condemn a garment to landfill with such short shrift – no matter how inconsequential that garment may seem on its own – is frivolous and only contributes to our spiralling waste crisis.

That being said, it’s worth noting that we are not talking here about the more classic process of walking back into the boutique, receipt in hand, asking for a refund and, with more than a hint of derision, being offered “only store credit” instead. Rather, we are talking here about e-commerce returns and, more specifically, free ones. Because, yes, while it’s better to put clothes back into circulation rather than straight on to the scrap heap, we ought never to have found ourselves in a place where these are the consumer’s two main choices.

The real problem, though, is that even this minuscule array of options is an illusion: In fact, as a Guardian article from 2023 notes, 50% of clothing returned doesn’t end up back in regular circulation at all.

So. Two questions, then: “Why not?”, and, “Where does it all go?”.

With regard to the first, it’s a question of turnover. The marketplace for online fashion is vast but also crowded – the competition is stiff. This means that, while there are warehouses of people (and robots) dedicated to packing your purchases first time around, that same dedication isn’t shown to your stuff when it slinks back in like that proverbial bad penny.

Not only do returned items often require repacking, they also require attention in other ways before they can be sent out as “new” again; they have to be inspected for dirt and damage, for example. But, even if they pass those tests, something as simple as untied shoelaces can be seen as such a spanner in the works of the well-oiled machine that it’s considered grounds for just giving up on a pair of otherwise fine sneakers.

It’s not that the standards are high, it’s that the bar is low.

This is exacerbated by fast fashion brands like ASOS and Boohoo, large enough to absorb the cost of offering customers free returns in exchange for having that purchase – even temporarily – on their balance sheet. According to the Business of Fashion, 33.7% of everything Boohoo sells, in fact, ends up being returned. With an annual revenue of $1.9 billion USD, that’s 640 million dollars’ worth of items returned; assuming that same 50% rate of ineligible products, that’s $320 million USD of clothing that doesn’t make it back to Boohoo’s warehouse for resale.

Given that the average price of a top on the website was around $14 as of March 2022, you can imagine what $320 million USD of Boohoo stock looks like – and it isn’t pretty.

So, bad as it feels in the moment, the stigma attached to brick and mortar returns actually serves a purpose: where in-person shopping has a single-digit return rate, the online return rate is between 15% and 30% – 32% for clothing. With over $100 billion USD in monthly online sales in just the United States every single month, this goes some way to explaining why e-commerce generates 4.8 times more packaging waste than in-person shopping.

Of course, there are solutions to the packaging problem: next-gen outfits like Sway and TIPA, used by likes of Levi’s and PANGAIA, have dedicated serious resources to replicating the qualities of these materials, in terms of durability and versatility, without the environmentally damaging petrochemicals. Material innovators such as Living Ink and Nature Coatings, too, are taking in the packaging issue from another angle – replacing the Carbon Black ink used for printing, toxic to humans and to the planet, with nature-based solutions derived from sources like algae and wood pulp.

These bio-based solutions provide a potential way out of the plastic hole into which we’ve so deeply entrenched ourselves over the last few decades through profiteering and lack of foresight. So, that’s something.

But packaging is far from the only problem. There’s also the issue of emissions.

In December 2019, UPS collected 1 million return packages daily in the United States. Not only do carbon emissions from returns typically add up to 30% to the number racked up by initial delivery, but according to Forbes, “a single item using a courier emits 181g of CO2, when being returned. But that is assuming 100% success rate with courier collections which is far from the case… If we take the median 12% failure rate… the total emissions increases from 181g to 203g CO2.”

As Inside Ecology neatly summarizes: “Fast fashion returns alone release the same emissions as 3 million US cars.”

That’s a lot of pollutants just for sending back something you don’t like – and which, to be honest, you already had an inkling you wouldn’t like or wouldn’t fit properly but decided to try on anyway because, “Hey, what’s the harm?”. Yes, you can get your money back – but there are other things you absolutely can’t.

Of course, consumers aren’t entirely to blame for a blasé approach to returns. Yes, there is a “haul” culture of “wardrobing,” the practice of buying big in the first instance and wearing items once, with little to no intention of keeping the majority of those purchases – in part to try things on, but also to show them off – but this is a culture intentionally fostered by fast fashion brands and online retailers. This is clear not only from the proliferation of free returns, but also of “pay over time” options like Klarna – a combination which means that the consumer never even has to make the initial outlay. They’ve no real skin in the game; why should they feel like it matters when everything they’ve been told says that it doesn’t?

As for the sellers, they want to see these purchases posted online, given airtime, exposed to as wide of an audience as possible; in reality, they don’t care whether that initial order is only temporary or who’s fronting the credit – in terms of marketing, and so far as their balance sheet is concerned, their work is done.

But so, of course, is the damage. Not just in terms of what has been created, but also in terms of what will be: ordering ten shirts when you only intend on buying one sends a false positive to the market – a message that says, “Demand for shirts is up! We need more shirts!”, all of which results in further mass production without consumption to back it up. And, once again, all roads lead to landfill.

Which brings us back nicely to the “Where?” of it all. If returns aren’t making it back onto the shelves and being sent out again to consumers, where is it that they’re winding up?

Well, it’s a mixed bag.

Some are snapped up by bulk order outfits looking to snag a whole lot of product for as little money as possible. On the face of it, this seems fine: nothing is wasted, the cycle continues. Right?

Well, no. That would be great, but – unfortunately – it doesn’t quite work like that. Even vultures, it turns out, can be picky about which carrion they have for dinner, and bulk buyers are quick to discard the items they deem undesirable. Those items are then shipped off to the Global South, where they flood marketplaces like Kantamanto in Ghana, and where – if they don’t sell – they once again, you guessed it, end up in landfill.

And some don’t even make it that far: according to Clean Hub, “There are a growing number of instances documenting open-air dumping sites, such as in Chile’s Atacama Desert. Reports claim there are over 741 deserted acres that have become clothing junkyards.”

So, that’s the “Why?” and the “Where?”, which really only leaves the most important question: “What now?”.

Well, first and foremost it’s on the retailers: it’s time for the fast fashion giants of the digital world to step up and set an example on all fronts – to admit that their decisions also impact the real world and stop influencing consumers to believe that they don’t.

Practically speaking, that means eliminating free returns entirely. Zara and H&M have already made that move, the influence of which cannot be overstated – the former belongs to a group which counts Pull&Bear, Massimo Dutti, and Bershka amongst its ranks, while the latter is linked by its parent company to Arket, COS, Weekday and Monki. Both are considered major bellwethers when it comes to the direction of the (fast) fashion industry.

And, while it’s fair to say this wasn’t necessarily undertaken with the Earth in mind – returns, after all, cost US retailers $816 billion in 2022 – the result is still the same and the knock-on effects still just as positive.

But intention does matter: it’s culture that needs to shift as much as anything else. The rise of returns is a symptom of over-consumption, not a malady in and of itself; part of a vicious and destructive cycle that it’s now vital we break as soon as possible.

Then there are brands like Zellerfeld, challenging the onlineretail model entirely with its 3D, print-on-demand service – a-made-to-measure model in which, getting exactly what you ordered, returns are non-issue. E-commerce platforms have been offering digital
fitting rooms now for some time, enhanced even further now by the advent of AI, and Zellerfeld’s system is surely the natural extension of that.

As a consumer, it’s natural to want a tailored shopping experience and it’s natural to want to the end product to be as close to your own specifications as possible. In short: consumers want a system
shift – it’s retailers who are lagging behind.

In fact, surveys continue to tell us that consumers are not only ready and willing to make more sustainable decisions, but that this is something that they actively want to do. If 66% of shoppers want to consume in a more Earth-friendly manner, what’s stopping them? If it’s not their own habits holding them back, then surely it’s the options presented to them by the companies they’re consuming from?

It’s easy to blame consumers, but for the most part they’re just working with what they’ve got in terms of knowledge and in terms of money; to presume an excess of either is to fundamentally misunderstand the situation of the average consumer.

And, at the end of the day, that’s who needs reaching most. Before that bad penny comes back around again.