By Felicity Bonello

Have you ever considered what happens to the products you order online that you send back? I think it’s safe to say that there’s a general belief your return item will be retagged, restocked, and redistributed to the next eager shopper, but if we can collectively remove our rose-coloured glasses for just a moment, it might surprise you to hear that there’s another side to the story. 

Many customers buy with an explicit plan to immediately return some or all their items, and until just last week, we too were adding three different sizes of the same shorts to cart, with the intent to send back the two that didn’t fit – we just didn’t understand at what cost. 

The Online Shopping Landscape

Year on year there’s been an explosive growth in online shopping, and since the World Health Organisation declared COVID-19 a global pandemic on 11 March 2020, and lockdowns prevailed to slow the spread, we’ve seen an even more dramatic shift in Australian consumers behaviour as the online shopping arena hit new heights. 

Last year, 9 million Australian households shopped online – that’s 82 percent of all households. To put this into perspective, an average of 1.6 million households bought something online each week in 2019; in April 2020 this increased to 2.5 million households per week. We’re doing some shopping, guys. 

According to Shopify, 20 percent of online-bought products are returned, compared to just 9 percent of items bought in a brick-and-mortar store. Naturally, when customers know they can get their money back just as easily as they spend it, they’ll shop with more confidence and spend more. But there’s always a cost, and even if it’s not a financial one to the consumer (hello “free returns”), what about our precious environment?

“The Australian returns landscape has changed drastically over the past year due to online sales growth,” cites Valentina Zarew, Responsible Brand, and Impact Strategist, Newromantic.

“Having to adapt to the already extraneous circumstances of the past two years, the solution to dealing with returns hasn’t been the top priority for retailers. The large volumes of returned stock have meant more and more retailers have had to opt to send returned goods to landfills or an incinerator – something that is wreaking havoc on our environment.”

Additionally, US retail returns logistics company Optoro, found that hauling around returned inventory in the US alone (think trains, planes and giant trucks) creates over 15 million metric tons of carbon dioxide emissions annually. That equates to more than what 3 million cars might put out in one year. 

The Return Process

In many cases the items that you buy online are picked and packed by a third-party logistics (3PL) provider. While some specialise in forward logistics (getting the items from your cart into your hot little hands) and others concentrate on return logistics (receiving returns on behalf of a specific brand), most 3PLs within Australia look after both pathways.  In all instances, items that are returned to a 3PL go through a quality control process, and at that point those products are deemed either worthy, or not, of re-joining the pick and pack production line. 

Yes, some products will make it back onto the forward logistics shelf, other times brands will donate returns to charity, offer sample or seconds sales, or sell to discount chains using this stock. But as is the nature of business, the bottom line always prevails; and that’s where a perfectly good product is destroyed simply because most retailers don’t have the scale to cycle returns back through to the sale stage.

While forward logistics is a smooth operation, returns are costly, time consuming, and not great for a brand or the environment; but given online shopping has an untapped growth potential, brands seem to continue to incentivise consumers to bracket buy (buy three – return two!), which essentially doubles the financial and environmental cost of logistics. It’s at this point that the free returns! free delivery! and discount codes! are starting to look a little less shiny. 

According to Tim Hill, Managing Director at Gold Coast 3rd Party Logistics (GC3PL) it’s not just returned product that needs to be deemed resalable, the packaging will be expertly examined too.

“From an administrative perspective we always QC returned product, check whether it’s in the original packaging and make a call as to whether it’s worthy to sell again. Each brand and product are different but something that’s initially sent out in say a nice white box, will, once it’s travelled around the country and been returned, come back looking pretty tattered; the product might be ok, but the packaging could be terrible, and you couldn’t send it out again.” So, what happens to that packaging? Is it recycled? “That will vary from brand to brand, and retailer to retailer.”

In response to an expose by American magazine and multi-platform publisher, The Atlantic, Presenter of the Wardrobe Crisis podcast, Clare Press recently spoke with ABC Radio Canberra and unpacked the misunderstood nature of returns. While it’s complicated, as are the solutions, Clare suggests that “the important thing to remember here is that we can change the narrative.” And change is on the horizon.

The Solutions Part

Solutions can be found at every point in the selling process. While digital fashion offers an opportunity to help consumers in the pre-purchasing phase, as time goes by, more retailers are becoming quick to address the (returns) problem, with platforms such as The Iconic harnessing data intelligence to forecast an expected rate of returns to help their logistics team manage stock levels. When an item does need to be returned, programs like Optoro’s reverse logistics technology allows retailers and manufacturers to resell unsold and excess stock more efficiently. And for items that are unable to be resold, there are great local organisations such as Thread Together that will put products to good use.

“If we think about this from a brand perspective, it’s an opportunity to lean into product stewardship, and assess the overall circularity, and ultimately the footprint of your organisation,” says Zarew.

“We also need to invest in local textile recycling. There will be a time when the customer, government or local councils are no longer bearing the brunt for resource recovery/diversion from landfill.” 

From the consumer side, there are simple measures we can all take; of course, consuming less to begin with is the ultimate goal but when you do need to shop online, try on goods carefully, keep the tags and packaging in check, and don’t walk around outside in shoes you may need to return. Do a deep dive into your favourite brand’s returns policy, research and inform yourself, and where possible, buy once and buy well. 

Also consider whether you can rent it, borrow it, or re-adjust it? If Angelina Jolie can, we can too! Buy for longevity, understand the size and fit – and if you are unsure, ask to see the item on a certain size model if a brand hasn’t provided an accurate depiction.

Naturally, every brand will have their own returns process, but here’s what a couple of our favourites are saying:

James Bartle, Founder, Outland Denim

“We understand that, despite significant uptake during COVID, purchasing clothing online and in particular selecting the right size can still be a barrier for customers. So, along with a focus on excellent customer support, we have always had a policy to offer our customers with free domestic returns and exchanges to make the process risk free. However, part of our return and exchange policy is that all tags must remain in-tact and the garment in original condition so that it can be re-entered into inventory. As a social enterprise, every single Outland garment represents positive impact. And so, it is absolutely essential to us that our returned garments, where still in original condition, find a new home. Returns are directed to our 3PL warehouse partners, which are selected based on their centralised location to our highest volume of customers, and for their own commitments to sustainability. Our warehouse partners QC incoming returns for marks, signs of wear, and intact tags. We currently do not offer shipping to various locations across the world (i.e., cross-border ecommerce), and won’t expand to these locations until we can justify localised 3PL setup that won’t compromise our commitment to reducing our carbon impact.”

Jono Salfield, Co-Founder, Afends

“We have tried to make our returns system as simple and fluid as possible! Our customers can head onto our returns page and receive a label to stick on their parcel to return to us. 
We encourage customers to use their original Afends packaging to stick the label onto, or recycle any package they may have around- this saves on potential waste. When the return is received in our warehouse, the item must have the original tags and be in a new, unworn condition for customers to receive their refund or online credit. Our returns team check this before accepting the return. The items are then put back into stock, re-bagged into our biodegradable bags (if they were not already returned in it, which a lot are) and our warehouse staff put them back in their designated areas ready to pick for new orders. We also offer a $10 flat rate for returns for refunds, or free returns for online credits. If items are returned due to being faulty, we will usually sell these at our sample sales- to ensure the garment isn’t just being thrown out and wasted.”

RELATED: This is how you create a sustainable wardrobe

RELATED: File this for when you’re shopping for furniture