The Truth about Returns

The stark reality of our online purchases.

In her post Free Shipping but at what cost? Clotheshorse podcaster Amanda McCarty shared insights into the stark reality of the journey that our online purchases take to arrive on our doorstep, and the impacts on people and planet along the way. But that journey doesn’t always end once the package gets to us. Data shows that ‘a quarter of all consumers return between 5% and 15% of the items they buy online’ (source). For apparel, the estimated return rate is 12%.

This statistic was reinforced on a recent episode of Clotheshorse when Amanda interviewed  Rachel Greenly, who published an article in the New York Times  about the reality of America’s fast fashion addiction. Rachel describes the experience of working in a fulfillment facility where she was tasked with sorting through returns – the bulk of which were clothes – in her words, “poorly made fast fashion clothes”.

Our friends at Frate shared that 95% of returns are in perfect condition. However, based on what we know, and what Rachel experienced, the cheaper the item, the better the chance that it will end up going to landfill instead of getting put back on the store shelf. But why?

The first thing to take into consideration is the markup for the retailer, which is often at least 100%. So, something you paid $15 for cost the retailer $7.50. 

Here is what is involved in restocking: 

  1. A person will examine the item to see if it was worn, has any stains etc. 
  2. Perhaps the tag was removed – if so it will need to be re-tagged.
  3. Depending on how much time has passed, the item may also need to be price-adjusted. 
  4. Then the inventory needs to be re-added into the system, 
  5. And then the item is put back on the store floor. 

At a minimum wage of $15/hour, you can easily see how it is not worth the retailers’ time to restock that $7.50 item. 

So how do we solve this?

The first issue is the buying, and what is driving that demand – the ingrained need for new, the quick trend turnarounds, the irresistible prices, the incentive to buy more to get free shipping etc. (This is mostly covered in Amanda’s post).

So what do you do with the item you didn’t really need, that didn’t really fit or look good when it arrived (because it’s cheaply made), or the extra tee shirt you threw into your online cart to qualify for free shipping?  You send it back, and most often at no cost because not only was the shipping free, so is the return! 

Around and around and around it goes. But here’s the really shocking part: Most of what gets returned never makes it back to the store shelves, or resold. Here’s why.

CBC Marketplace did a great segment on returns back in 2020 – a shocking expose of where Amazon’s ‘free’ returns mostly end up. Spoiler alert: landfill. While there aren’t clear stats for Canada, it is estimated that 5 billion pounds of returns end up in US landfills every year. And we don’t anticipate the flow of goods to be much different in Canada particularly because of something called the Federal Duty Drawback. This is an absurd program that rewards the destruction of unsellable goods – either from excess inventory (a huge problem in the fashion industry which was only exacerbated by COVID), damaged products and…. returns!

Basically, if you are a retailer and you import products into Canada with the intention to sell those products, and for whatever reason you don’t (see above), the federal government will issue you a credit on your next import duties, through Canada Border Services Agency (CBSA).  In order to qualify for the duty drawback, the goods must be destroyed (eg. burned or landfilled) and removed from the Canadian market. What’s worse, CBSA specifically excludes recycling as a means of destruction, and instead lists incineration and landfilling as satisfactory to qualify for the drawback!!!

So what is the solution?

Shop more mindfully – buy only what you need. The average American purchases 64 new articles of clothing a year. That seems REALLY high, particularly given how much of a rise thrift has had, but let’s suppose it is an accurate average. Reducing this consumption by 75% still works out to more than one new item per month! Depending on where you’re at with your sustainability journey that might seem like a big adjustment, but to others who are already used to shopping their closets, and thrifting for most of their clothes, this might actually seem quite generous.

Shop locally, so that the need for shipping is eliminated. Support a local business, reduce emissions from shipping, plus the plastic packaging, AND, chances are you are going to actually try on what you are buying, which also reduces the number of returns based on bad fits. 

Do you absolutely need to buy something online? If yes, then again, shop mindfully. Consider the cost of ‘free’ shipping (see part 1) and try to avoid a scenario where you’ll need to return an item. Take your measurements and check out the size guide on the website (we know they aren’t always accurate) or read the reviews to see how the different sizes fit. Thankfully there is new technology being introduced to help with fit and some brands are starting to work with it in an effort to minimize returns. 

Make no mistake, this issue isn’t just the responsibility of the consumer – the fashion industry plays a significant role in this too. We wanted to share what happens to returns to help raise awareness, as it will hopefully impact your purchasing decisions. No matter where you’re at on your sustainability journey, it’s never too late to get started. Awareness is the first step, because once you know, it’s hard to un-know.

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