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Opinion – Companies must overhaul wasteful return policies

The environmental cost of company returns is frankly massive. Up to a quarter of such items end up in landfill, simultaneously hindering profits and the planet. Here’s why it doesn’t have to be this way.

What do you do when those new Yeezy crocs come out the box a tad too snug, or that ‘khaki’ coat turns up in a garish lime green? You box the items back up and return them, of course.

What you probably didn’t know, however, is that the product you just angrily stamped and left with the post office has a very decent chance of ending up in landfill or being torched.

Considering we’re already tittering on the cusp of irreversible climate damage, this seems unnecessary and abhorrently wasteful, right? But, here’s why things currently play out this way in the ceaseless retail world.

The current state of play

There’s a reason the fashion industry makes up a reported 10% of all global emissions.

Despite the continued rise of circular fashion, and nifty apps like Depop and Vinted – here’s Thred’s guide on resale if you’re interested – up to a quarter of all retail bought items end up being thoughtlessly tossed away by their sellers.

This results in some 27 million tons of carbon dioxide annually, with global brands like H&M, Burberry, Nike (and countless others, no doubt) having been outed for burning perfectly good stock instead of donating or reselling it.

In-fact, in the grand scheme of things, only an estimated 20% of the 3.5bn returned products each year are deemed beyond repair. Yet, the equivalent of 10bn pounds ends up in landfill regardless, according to impact reports.

If you’re suddenly feeling guilty for a post-Christmas re-boxing spree, or sending back the drunken purchase of a needless margarita machine, don’t stress it. You’re well within your rights to do so, and the burden of responsibility lays with the retailers.

The main problem is, when it comes to these companies, returns simply aren’t good for profit margins.

Processing the average return usually results in a 59% hit to the price it was originally sold for, and thus the priority is to dispose of them as quickly and cheaply as possible – even if they’ve barely left the box and remain in mint condition. Grim, eh?

Many of these giant brands may appear to be ‘socially conscious’ on the surface, but in reality, sustainability and profitability are usually viewed as being at odds. Here’s why it doesn’t have to be that way.

Ways to improve the situation

Once you begin to understand the mechanics of how it all works, you can see where the problems lie and how they can be addressed.

First and foremost, a change of attitude is required. If success continues to be measured on a strictly cost-per-return basis then we’re screwed. Perpetually ‘cutting losses’ will get us nowhere.

As it stands, business managers are incentivised to minimise expenses and a trip to landfill is deemed far cheaper than in-house repair services, even if refurbishment could lead to items being resold and a significant uptick in revenue. It’s convenience over thoughtfulness.

The acceptance of ‘inevitable losses’ has to be overhauled to meet the demands of the next generation of consumers.

If the barometer instead involved the overall percentage of resold resale products, and the net profit generated each year, then retailers would be more driven to prevent waste and would arguably make even more money. It’s a matter of simply putting the systems in place.

This, however, leads on to the biggest hurdle at the moment, the real lack of data within resale records. A recent report from a marketing expert at Fast Company found that 53% of a major retailer’s returns were assigned an F grade in quality before even being inspected.

Without any actual level of analysis, it’s impossible to differentiate, for instance, a pair of jeans that simply didn’t fit the buyer from a pair with a huge rip. This leads to both items being lumped in with each other and discarded when it’s simply not necessary.

If companies can ascertain which products are indeed salvageable – or already in shop quality condition – they can begin to put a dent in the ridiculous levels of waste.

This could be achieved through simply requesting buyer pictures and perhaps an optional description to accompany the item in the returns phase.

Sophisticated AI systems are already in play to try and sell us products on these websites after all, and they could easily be set to refining resale systems too.

Beyond this, there’s no excuse for burning items or chucking them in landfill when clothes can be donated for free to the millions of people who really need them.

It’s about time that profitability and sustainability are genuinely given equal consideration.


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