The environmental impact of online shopping
We all know how convenient it is to shop online, but have you ever considered just how many items are returned and what this process of returning products is actually costing?
The Guardian recently published an article that attempted to quantify some of these questions around returns. They found that some online retailers expect to see around half of all orders returned. This is an enormous logistical challenge that is even more complex than shipping a new product to a customer.
Last Christmas, returns in the UK increased by over 24% compared to 2020. This data is according to ZigZag, a company that specialises in processing returns and works with brands such as Boohoo, Selfridges, and Gap. Another returns specialist, ReBound suggested that their December figures were up 40% on the year before.
KPMG has estimated that the process is costing over £7 billion a year at present, which is clearly not sustainable. But the problem is not just the cost of processing the returns, it is also a question of sustainability.
Most returns cost around £20 just to process. This means that for many smaller items it is not even viable to handle a return including checks that the item is in safe working condition, is clean, and is in a good enough condition to be sold again. It’s a manual, time-consuming process.
If a customer is returning a low value item then it’s likely to just be discarded. Sometimes it may be possible to recycle the product, but it’s more likely that all those returned nail clippers and hairbrushes just end up in landfill.
About 15% of all electrical products are immediately disposed of because it’s not worth the cost involved in trying to fix the problem that led to the item being returned. Larger items, like a washing machine, can usually be repaired and then sold at a discount on eBay, but many products cannot be sold or used again for hygiene reasons - cosmetics is a good example.
In France, companies are banned from destroying unsold products - the law says that the company has a responsibility to process all returns even if it means making a loss on that sale. In the UK, Amazon has been forced to deny destroying returned electrical products such as TVs and laptops. The company says that all these returned items are recycled or donated to charities.
Amazon is not alone - every company selling products online faces the same challenge. In my opinion, there are several issues that need to be addressed to tackle the problems created by so many returns:
- Consumer Education. Many customers will deliberately order more than they need because they know that returning what they don’t need is free and simple - fashion and shoes are often purchased this way, just to check on sizes. Brands need to educate their customers, so they are more aware of the environmental impact of ordering 5 products when they only need 1. Regular shoppers that know their size could even be rewarded for only buying a single product.
- Refine the Process. It’s not acceptable to see so many returned products just destroyed because it’s cheaper than processing the return. Laws may help - as they have done in France - but a focus on improving and streamlining the returns process will be faster and will save cash immediately.
- Establish Alternative Markets. Brands may not want to dilute their value by admitting that all their returns are posted cheaper on eBay, but eBay has itself been very open about stating how many brands are now using their platform to sell returns or seconds. Let’s not hide it. Build these markets and sell the returns rather than just destroying them.
Customers love e-commerce. They aren’t going to stop buying too many items in the near future and brands will not want to start penalising their customers because that will just force them to use other stores. We need to think carefully about how to make e-commerce and online retail work better because sending returned products to landfill is simply not a long term option.
Jo Weigh is Senior Manager for Consulting in EMEA at TTEC with a wealth of expertise in the CX and outsourcing industry focussing on digital transformation and enablement for industries including Retail and Financial Services.
Jo is helping some of today’s leading brands achieve their full potential by humanising business and delivering...