UPS is predicting a massive amount of returns on January 2, dubbed "National Returns Day," the peak day for returns following the holidays. People are expected to return 1.9 million packages into the UPS network on January 2, representing a 26% growth in returns from last year.
While in store returns rates sit between 5 and 10%, they jump to 40% for online sales and their impact is considerable. Five billion pounds of returned goods end up in U.S. landfills each year. Less than half of returned goods are resold at full price. Sometimes it’s cheaper to throw away merchandise than to repackage, re-inventory, store it, resell it, and ship it out again.
Among them, clothing has a particularly high return rate, between 40 and 50%. In 2020, nearly two-thirds of shoppers bought multiples of the same item with the intention of returning some of them.
The fashion industry is the 2nd largest polluter after the oil & gas industry. Textiles (clothes, shoes, belts, accessories) more than other products, when returned is often landfilled, considered too time- and cost-intensive to add back into inventory. Eighty-seven percent of all textiles will be landfilled or incinerated, never getting sold or kept by shoppers.
Some of it has to do with inexact matching of supply & demand (30-40% is overproduced). Manufacturers expect a significant percentage of their products to go to waste. So they intentionally produce more than they expect to sell to ensure that there will be enough of whatever sizes or models prove to be “keepers.”
The Cost of Fast Fashion
Fast fashion refers to cheaply produced and priced garments that copy the latest catwalk styles and get pumped quickly through stores in order to maximize on current trends. The biggest players in the fast fashion world include Zara, UNIQLO, Forever 21 and H&M.
In 2012, Zara was able to design, produce and deliver a new garment in two weeks; Forever 21 in six weeks and H&M in eight weeks. That all comes at a huge cost to the lives of the workers who make the clothes, as well as the environment.
Nearly 70 million barrels of oil are used each year to make the world’s polyester fiber, the most commonly used fiber in our clothing. Sixty-three percent of textile fibers are derived from petrochemicals. The use of these fibers release microplastics when washed, which leads to about 500,000 tons of microfibers in the ocean every year - the equivalent of 50 billion plastic bottles.
Cotton, another commonly used fabric, is one of the thirstiest crops that has dried up sea beds, like the Aral Sea in Uzbekistan. And, shockingly, over one quarter of the world’s pesticides are being used to grow conventional cotton.
The main goal of fast fashion giants is all about lowering production costs. This is precisely why they neglect the sustainability aspect of production, starting from using non-biodegradable fabrics that are fully processed with chemicals, to throwing production waste into water streams, lakes, and oceans. Fast fashion brands use open-loop production cycles, meaning that all of the waste goes straight outside to pollute waters and lands.
Here are some trends that hope to mitigate the environmental impact in the textile industry.
The used clothing market is now a serious business. The good news is that secondhand fashion is poised to grow 185% (compared to fast fashion at 20%) in the next 10 years. ThredUp processes hundreds of thousands of used garments every day and has even recently started trading as a public company. When customers return ThredUp's Clean Out Kits (from brands like Athleta and Reformation), they earn store credit (plus a bonus payout!) at the brand. In addition, ThredUp builds and manages resale shops for brands such as Madewell.
For those desiring frequent outfit changes, renting clothes can offer an attractive alternative to frequently buying new clothes, especially for children's clothing where needs change over time.
Brands with Recycling Outlets
Unlike platforms such as Vestiaire Collective and The RealReal, which rely on consumers reselling their own items, Nordstrom will stock items from their own inventory of returned and damaged merchandise.
In 2017, Patagonia launched Worn Wear, an online platform where you can buy, trade and sell second-hand Patagonia goods. And in November 2019, Patagonia opened its first physical pop-up store for Worn Wear.
H&M, has at least started offering recycling services at more than 4,200 stores to prevent their customer's unwanted clothing from ending up in landfills. H&M accepts textiles old or new, from any brand, and for every bag of textiles customers drop off, they receive a discount card for 15% off their next in-store purchase.
The North Face's Clothes The Loop program, accepts and sends apparel to Soles4Souls, whose mission is to create sustainable jobs and provide relief through the distribution of shoes and clothing. In exchange for their donation, customers receive a $10 reward toward their next purchase.
Finding the Right Fit
To prevent consumer bracketing, where customers buy multiple versions of the same item to try at home, with the intent of returning those that aren't suitable, retailers might follow the lead of influencers to make shopping online more precise. In order to reduce returns, customers need to be confident that what they order will fit as expected.
Rather than generic size charts, providing precise measurements for each garment, as sellers on second-hand platforms such as Depop often do, is an approach retailers could adopt to overcome the problem.
With Bodi.Me users are invited to input their measurements and shop with supported brands. An information bar tells them which size to opt for based on their own measurements and the sizing data from each brand. The size recommendations have reduced returns in some cases to less than 3%.
Gifster is a free service for members to make and share wish lists specifying sizes, colors and other important details reducing the chances an item being returned or exchanged.
Happy Returns, recently acquired by Paypal, allows brands to utilize 3800 ‘Return Bars’ (Fedex and Staples among them) across the US, where customers can drop off their returns for free, without the need for any new packaging. Multiple items are aggregated in one container and shipped back in bulk.
Optoro, the world’s leading returns optimization platform, offers brands the chance to resell returned stock on their platform Blinq. Alongside rerouting stock to other platforms including Amazon and eBay, they estimate they reduce landfill waste by 70%.
The Renewal Workshop, works with brands to turn unsellable returns and excess inventory into renewed products or upcycled fabrics, providing a circular solution and diverting more than 78,000 pounds of textile waste from landfill between 2015 and 2018.
To educate customers about the environmental cost of return shipping, manufacturers could create carbon-emission labeling on return packages that visually displays the greenhouse gas emissions required to send items back.