What’s the best way to deal with an unwanted piece of clothing or accessory? Consumers have options—from regifting to probably just regretting the purchase—but more often than not, it’s returning the item. And retailers? Well, there aren’t many options as far as returns are concerned beyond just, well, dealing with it.
But that comes with a cost, not just for the retailer but also the environment. Per research cited by The New Yorker, the annual retail value of returned goods in the US is steadily nearing $1 trillion.
“All of that returned inventory has to go somewhere, and often, it simply cannot be restocked,” Tasha Reasor, SVP of marketing at Loop Returns, a returns management software that helps e-commerce brands, told Retail Brew in an email. She added that compared to other categories, returns have a larger impact on fashion brands as they “struggle with staying sustainable, in part thanks to consumer practices like bracketing (ordering more than one product with the intention of returning all but their favorite of the bunch).”
She also said that despite online retailers’ best efforts to convey size and color, “it’s still difficult to know if an apparel item fits sight unseen,” which means a large amount of online apparel returns end up in a landfill while increasing carbon footprint as items are shipped back and forth.
Per Brian Ehrig, partner in the consumer practice of Kearney and co-author of the firm’s 2023 Circular Fashion Index (CFX), depending on the category and brand, return rates range from anywhere between 15% and 50% and becomes a complex and costly process for brands.
“In fashion, they have to assess the condition of every item that comes back and determine if it can be put back to stock, whether it needs cleaning, repair, or if it is defective and needs an alternative solution such as destruction, donation, or being assigned to the used/resale market,” he told Retail Brew.
But since we have established that the environmental impact of fashion returns is significant, the real question that could eventually nudge retailers into finding solutions is: Do consumers care?
According to Loop Returns, they do. The company’s latest consumer report noted that ~49% of surveyed shoppers considered eco-friendly return options, sustainable or reusable returns packaging, and carbon-neutral order options as important factors in whether they opted to make an online purchase. This was “especially true of younger shoppers,” the report read. Nearly 1 in 3 Gen Z and Millennial shoppers care about eco-friendly return options when buying online, according to Loop.
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And while many brands are aware of the younger generation’s affinity for eco-conscious options, the strategies they can use to help address the issue are somewhat limited. Ehrig noted that the practice of destroying products, which some retailers have resorted to in the past, but has become “untenable…and actually illegal in some countries.”
Still, he added that some retailers would choose to “incinerate returns rather than go through the process of making the products available for sale or finding some other creative way to sell them such as with upcycling.”
He said retailers do have options however, including recycling, upcycling, renting apparel, and resale, which according to Ehrig is a “good way to deal with returns.” But the market remains small, and it’s not easy for consumers to get the supply needed back to retailers. “Making it easier to get well-taken-care-of garments and shoes back to the brands and retailers they came from is a key unlock,” he said.
Another option, per Claire Tassin, retail and ecommerce analyst at Morning Consult, is to simply reduce the number of returns coming back. “Retailers are making investments to help ensure shoppers get the right item the first time,” she told Retail Brew. “When sizing is inconsistent or product descriptions aren’t accurate, shoppers will buy multiples of an item and return what doesn’t work."
Meanwhile, Loop Returns’s Reasor believes retailers can benefit from charging handling fees for returns, which a number of retailers like Zara and Amazon have already resorted to. “Return fees, when applied strategically, can actually improve customer experiences—because in today’s world, convenience is still top priority for consumers, and retailers know they need to provide an experience that lives up to these fees,” she said.
As for fashion brands, Reasor added, the way they approach returns and exchanges depends on their brand values and operations needs. “Where a fast-fashion retailer might prefer to just send returns to a landfill or recycling center, other more sustainability-minded fashion brands might aim to restock or resell their returns as often as possible,” she said.