Record online shopping this holiday season has fueled another record for e-commerce companies: returned goods.
Prompted by a clogged supply chain, millions of shoppers got an early start on searching Amazon, Walmart and other online retailers for deals even before Black Friday, when holiday discounts traditionally start. Cooped up at home because of the pandemic, people didn’t stop clicking. Online sales reached $205 billion in the US, according to Adobe, a new holiday season high.
Not all of those purchases worked out. Not having been able to see or try products, many people shipped those gifts, as well as their own online purchases, back to retailers. The process creates headaches for companies, which have to sort and store the items and decide if they have any resale value. Returns also take a toll on the environment, requiring additional fossil fuel to ship and creating tons of trash.
Returns are a normal part of retail. Clothes don’t fit, appliances have manufacturing flaws or shoppers just change their minds. Schlep that janky blender back to the big box store and a refund to your credit card is usually quick and simple.
Online shopping has turbocharged the process because consumers often plan to return some of the goods they buy. That’s especially true of clothing, which shoppers buy in multiple sizes to try on as they might in a dressing room. The mindset contributes to an estimated return rate for online purchases that’s as much as five times higher than for brick-and-mortar purchases, according to Optoro, a company that manages returns for online retailers. Retailers told the National Retail Federation they expect to see $158 billion of merchandise returned from online and in-person holiday purchases, a 56% increase from 2020.
UPS expects to handle more than 60 million holiday returns this season. In a survey, more than one in four people told the carrier they planned to make a return over the holidays. One in five said they’d already done so before Christmas.
Retail giant Walmart, bespoke women’s suit maker Koviem and other companies that want to reduce waste have invested in online tools designed to help you find the right size without trying clothes on. Additionally, some companies track customers who make a great deal of returns, potentially banning them from returning purchases if they cross a certain threshold. Finally, some companies have even found it’s easier to let you keep the item along with your refund in order to save on resources.
The bottom line is that even though allowing returns can increase customer loyalty, companies don’t want returns to eat up too much of their holiday revenues, said Audrey Guskey, a marketing professor who teaches consumer behavior at Duquesne University.
“They really feel like it’s money in their pocket,” she said.
More online returns means more waste
To handle returns, companies run their fulfillment process in reverse. It isn’t as efficient as getting goods to customers in the first place, says Tamar Makov, a researcher at the Ben Gurion University of the Negev’s business management school. One reason is that companies haven’t invested in the returns process to the same degree they have for deliveries of your purchases. Sorting through them is also a hassle.
“Unlike products that come from a factory, returned products are not homogeneous, and vary in terms of condition, packaging, tags, or even how long consumers held onto them,” Makov said in an email.
Retailers simply dispose of low-cost items if that’s cheaper than reselling them, Makov says. An Amazon facility in the UK sent returned items to a “destruction zone” that disposed of millions of items in a year, according to ITV News. (Amazon has said it tries to donate or recycle goods.)
Optoro estimates that about 5.8 billion pounds of goods returned to all retailers in the US end up in the landfill in a year.
A return ending up in the dump is an environmental worst-case scenario. Trashed items require even more fuel for transportation because they make the additional trip from a return facility to the dump. Rather than reselling your item, the retailer will send a new item to another shopper, meaning more resources consumed. If a retailer sends your return to overseas recyclers, reclaiming the materials can release harmful chemicals.
Alternatives to mailing in returns
You can reduce the environmental impact of your return by taking it back in person if there’s a store near you. Of course, that isn’t always an option.
A more effective approach is to reduce the number of returns you need to make. Retailers are trying to help.
Companies like Gap and Walmart are investing in software that helps shoppers find the right fit so they won’t “bracket,” the industry term for buying the same item in multiple sizes and returning what doesn’t fit. The practice is standard, with 58% of shoppers saying they’ve done it, according to a 2021 poll conducted by e-commerce customer service company Narvar. That number has grown from 40% in 2017.
Services like Drapr, acquired last year by Gap, let you create 3D avatars to see how a piece of clothing is likely to look on your body. Zeekit, acquired last year by Walmart, also lets you upload a photo or choose a model that looks like you to see how clothes fit (Walmart said it’s still building the service for its shoppers). Alternatively, algorithms like Fit Predictor and True Fit estimate what size you should order based on personal information, your order history or your size from another retailer. Koviem, the women’s suit maker, uses software from 3DLook that lets customers see how their made-to-measure suit will look on them.
More customers are also finding that a company will offer a refund without asking them to send a low-cost item back. AlixPartners, a management consulting firm, estimates retailers will refund $4.4 billion in goods without getting anything back from customers for purchases from 2021. One such company that allows a “return” with no actual return is Jockey, which confirmed its customer service workers can approve this type of refund.
“We trust their real-time judgment when helping customers,” said Jockey spokesperson Matthew Waller.
If you find yourself with such a returnless refund, you can give it to a friend or family member or offer it up on a free items exchange like FreeCycle or Buy Nothing. You might also consider donating it.
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