This post was originally published on Forbes.com.
‘Tis the season for flash sales which creates high proportions of returned clothes that often end up being incinerated. To the detriment of the online clothing stores' economy and the climate.
Online clothing stores struggle with average return rates on customer purchases of 15-20% globally. One of the largest players in the European market, Zalando, recently disclosed their return rate being around a whopping 50%.
But given the fact that flash sales such as the soon to come Black Friday and Cyber Monday mostly encourages spontaneous consumer purchases, the return rate for clothing spikes dramatically following these limited time periods. According to a study from KPMG, 31.4% of consumers who had bought fashion apparel on 2017’s Black Friday, expected to return one or more items.
The same goes for Amazon’s Prime Day, Tony Sciarrotta, Executive Director of the Reverse Logistics Association, told Supply Chain Dive:
"There could be more returns coming. People may have taken advantage of it and bought things they really didn’t need or want because it was such a good deal and they can take advantage of Amazon’s no-real-questions asked [return] policy."
With return rates up to 30% on Black Friday, the revenue lost from unnecessary returns from this day alone sums up to billions of dollars globally. And with Black Friday still growing as a global shopping phenomenon that is becoming increasingly more online, the problem with unnecessary returns is on course to grow even further.
The expense the online fashion companies goes well beyond free shipping. Once a product is returned, a retailer pays for it to be unpacked and assessed. Shoes and apparel worn only to try the fit might get another shot at full-price retail. But that’s a small percentage of everything that comes back used or damaged. According to Optoro Inc., a Washington, D.C.-based company that helps retailers including Target Corp., The Home Depot Inc. and Best Buy Co. Inc. manage their returns, less than 10% of the merchandise it processes goes back to retail shelves. And according to a recent survey of 300 retailers, only 48% of what’s returned can be resold at full price.
This development also spells trouble for the climate as the logistics surrounding the millions of returned parcels generate tons of carbon emissions. Returned clothing must be handled, refurbished, possibly re-shipped to a bulk reseller or even worse: Burned or shredded.
Timo Rissanen, an associate dean at Parsons School of Design and a professor of fashion design and sustainability at the school’s Tishman Environment and Design Center explains to Vox how this is a common practice across the entire fashion industry:
"[...] Where it gets insane is thinking about clothes that were never worn in the first place. The fabric was made, the garments were made, the labor was put in, and then the stuff gets burned. It represents all kinds of different waste across the system."
Whether the problem with unnecessary returns spikes again in 2018’s Black Friday we will see in the coming weeks. But in all likelihood, both the companies bottom lines and the climate will take an additional beating once again.
