UK e-commerce returns could cost up to £7bn a year

January 10, 2022 by
Frank Calviño
Photo by Shannon Tremaine for Unsplash

UK e-commerce returns could cost about £7bn a year and heavily impact companies’ carbon footprints. 

In one single hour, during this past Christmas day, 709 products were returned online via ZigZag; at 3.51 am a £99 off-the-shoulder dress was the first item to be deposited at an InPost locker. 

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According to ZigZag, returns have surged by 24% the year before. ZigZag works with the likes of Boohoo, Selfridges, and Gap. 

Another returns specialist ReBound has recorded even higher demand, with 40% more returns in December than a year earlier.

Clothes are the most returned item in UK e-commerce

Currently, in the UK, half of the clothing bought online is returned to some retailers, the whole process is estimated to cost businesses about £7bn a year, according to a 2020 study by consultancy KPMG. 

Measuring the environmental costs of e-commerce returns is difficult, but the transport, storage, and disposal of items that cannot be resold because they are damaged or dirty is likely to weigh heavily on brands’ carbon footprints and poses troubling questions about the dark side of the online sales boom.

But the “return pandemic” does not limit itself to the UK. The idea that buying online means that you could easily return the package, something that has become an industry standard, has created the same situation or worse all over the world. And the worst case of e-commerce returns is happening in the USA. 

The USA is a “paradise” for e-commerce returns

United Parcel Service (UPS) predicted that it will need to process a record 1.9 million returns on 2 January 2022, which it has dubbed “the National Returns Day”. 

This is due to the fact that more than half (55%) of Americans claim to have plans to return unwanted holiday gifts within a month of receiving them, according to a survey published by the National Retail Federation.

Due to the now-famous e-commerce returns policy of Amazon the standard is to accept any return - without the need of a specific reason - for any kind of product sold online. 

This has to lead to 20% of online-bought products, to be returned. Compared to just 9% of items bought in a brick-and-mortar store. 

The environmental cost of returns 

According to a survey done by goTRG retailers throw away or liquidate approximately 40% of returns, totaling about 5 billion pounds of waste every year. As a result, items that may be in perfect condition end up clogging up landfills. 

Keep in mind that every truck carrying returns also carries a significant carbon footprint. In fact, the average commercial truck drives about 120,000 miles per year - or 19.3121,28 kilometers - according to the Environmental Protection Agency (EPA reports, yielding approximately 223 tons of carbon dioxide into the atmosphere.

According to current statistics, many e-commerce retail products have three different packages - or more - and close to 30% of them - globally - are returned - either permanently or to be exchanged for another one - meaning that at least 1 on every 3 products, bought online, will end up in a landfill, after being transported at least 4 times. 

All in all, e-commerce returns have become an industry standard but also, a real issue from an economic and environmental perspective. As an industry-standard, e-commerce returns have become inalienable rights of the customers. Meaning that any e-commerce that doesn’t accept returns - in the wider broader sense of the policy like Amazon does - won’t be competitive because people just won’t buy on it. 

And for those reasons, you can’t erase or reduce the e-commerce returns. Instead, one of the main goals for any e-commerce that wishes to succeed - and be sustainable - in 2022, is to control the economic backlash and environmental concerns derived from e-commerce returns. A titanic feat that no one has yet a clear path to tackle. 

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