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Counting the cost of returning unwanted presents

Author: Martin Done

Millions of people across the world will be repackaging unwanted presents to send back to the retailer after the holiday period.

While it may feel like the most responsible way to deal with that ugly sweater from your aunt, it comes at a huge cost to the planet. It has accelerated hugely since the growth of online shopping during the Covid period.

January 2 has been dubbed National Returns Day and many consumers think that the goods will go right back on sale for the next customer but the reality is that most cannot be resold as new. Many will end up in landfill due to the problems associated with returned stock and the need to free up warehouse space.

Clothing in particular has a high return rate, up to 50%. This is particularly true since the rise of online with the bedroom becoming the new “fitting room”. In addition, competition for online purchases has led to many retailers making returns easy for customers to gain competitive advantage. The unintended consequence is that the easier you make it to return, the more returns you get.

There are many reasons why goods are not put straight back on sale. Sometimes the returned goods have been damaged, unpacked or are no longer in season, such as winter coats returned in Spring. Often the value of the product is so low that it’s cheaper to throw it away than handle the resale logistics. In addition, some sellers have contracts with suppliers that don’t allow an item to be sold more than once.

So what are some of the measures that retailers, consumers and governments can take to reduce the environmental impact?

France has already banned the destruction of unused consumer goods and other countries will no doubt be looking at similar measures to avoid adding to the landfill problem. Retailers are considering a range of measures, including minimal packaging, clearer descriptions about products and sizing and more energy-efficient warehouses. Ikea has introduced virtual reality to help customers see products in their homes. Other technologies, such as TrueFit, are being deployed to help consumers more accurately to choose their size.

Competition for market share is stopping the introduction of charges for returns in the short term but some retailers are contacting frequent returners to try and get them to stop over ordering. But the reality is that consumers want a positive returns experience and to excel at this encourages them to stay with a brand.

So ultimately a lot of the responsibility for reducing waste will depend to a large extent on consumer sentiment and behaviour. We will need to see a fundamental rethinking of what we all purchase in the first place and maybe a shift of behaviour around present buying.

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