As the UK gears up for this year’s festive shopping spree, retailers are increasingly worried about how to handle the millions of unwanted items bought online and then sent back by shoppers.
Up to half of clothing bought on websites is returned, depending on the retailer, and last year the number of items sent back rose by 26% on 2021, with the biggest day for returns being 28 November, the Monday after the Black Friday discount day, according to returns specialist ReBound.
UK shoppers posted back more than £4.1bn of online clothing purchases last year, according to analysts at GlobalData, which estimates that figure will rise by 16.7% before 2027. Meanwhile, the proportion of people ordering several items to make a choice and send some back has this year risen to 46%, up from 33% in 2021, according to the returns logistics company ZigZag.
With profits under pressure amid rising costs of transport and labour, and growing concerns about environmental impact of the many returned items that are too costly to reprocess and resell, retailers have begun serious attempts to discourage shoppers from sending items back.
The online fashion specialist Asos, for example, said in May that just 6% of shoppers handed a £100m knock to profits because they frequently order discounted items, of which they send back a high proportion. Earlier this month, Asos highlighted the battle against high return rates as a major part of its effort to cut costs in the year ahead.
Here we look at why returns have become such a big problem and the ways companies are trying to tackle the serial send-it-backers.
Tight clothes and tighter budgets
Fashion returns have shot up since the Covid lockdowns ended as closer-fitting items – especially dresses and jackets – have come back into vogue, meaning shoppers are more likely to buy two or more products to ensure they have the right size.
Meanwhile, more than one-third of online shoppers, 35%, say they are more likely to return an item because of the cost of living crisis, according to research for returns handling specialist ZigZag. Tighter budgets make getting the refund more urgent and drive some to chance wearing an item before sending it back.
The rise of social media, which prompts some to order an item just for an Instagram snap, is also thought to be having an impact.
Written warnings
Asos and Next are among the retailers sending out letters to problem returners – a customer who sends back more than nine in 10 of the items they order over an extended period, according to one industry definition – warning them their accounts are being monitored.
Asos customers found to have continued to abuse the system may then have their account deactivated – although this is understood to be a tiny proportion – considerably less than 0.5% of those shopping on the site.
Next says it only writes to those who have been returning an extremely high proportion of the items they order for over a year and protections are in place for vulnerable shoppers who may particularly struggle with finding the right size.
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From free delivery to fee delivery
In September, H&M became the latest on a list of retailers, including Boohoo, New Look and Uniqlo, who are now charging for online returns – unless they are brought back to a store in person. Several other big players are thought to be weighing up introducing delivery fees in one way or another this year.
Asos, which has used free returns as a marketing tool in the UK, is experimenting with charges elsewhere, billing those in the US and some European countries, such as Poland, Belgium or Portugal, if they send an item back after 14 days. In some countries all returns are now subject to a charge unless an item is faulty or incorrect including Australia, where it is A$8.99 (£4.67).
Some retailers are now only offering free returns to those who spend over a certain amount or are encouraging shoppers to sign up to a loyalty scheme to access the service.
Adapting ranges
Retailers are using data to help them spot products with problems more quickly and either take them off sale or adapt. Codes used to help customers communicate why they have returned an item are then analysed with AI to help identify brands, materials or manufacturing glitches on particular products – such as a poorly sewn button or seam or fit – that leads to items being sent back.
Technological solutions
New technology ranging from body-scanning machines to digital avatars has been trialled to help online shoppers get the right item straight away.
Marks & Spencer’s True Fit tool, for example, allows shoppers to input their body shape, height, age and other brands they find fit well in order to get the right M&S item. Meanwhile, the online specialist Zalando is testing out a system in which you can create a 3D model of yourself to try on jeans – one of the trickiest items to get a good fit without buying in person.
Such ideas have been around for a while but have yet to make a decisive mark on returns. Measuring yourself and creating an avatar can be a time-consuming, and perhaps depressing, experience and may still not result in the finding the right item. Nike has abandoned its Nike Fit service, which launched in 2019 with the aim of using AI to suggest a customer’s size if they scanned their feet with their phone.
However, other uses of tech include analysing returns patterns to sort the avid fans from the system abusers. The returns handling specialist ReBound says that between 12% and 20% of customers generate 80% of refunds, “but this percentage contains both the best and worst customers”. It says retailers need a “well-informed approach to their shoppers” to spot those taking advantage of the system.
