In the US, only fashion items returned after online purchases generate emissions equivalent to 3 million cars, according to CleanHub.
Recently, the fashion and retail technology site The Interline analyzed the skyrocketing environmental costs from e-commerce returns.
Customers return goods purchased on Amazon at a store in Clifton, New Jersey, USA, 2021. Photo: AP
Accordingly, customers expect convenient (often free) returns as an essential part of the online shopping experience. For example, Amazon allows customers to receive instant refunds at return locations, without any reason, and for free.
The free return benefit greatly influences purchasing decisions. With the lenient policy, buyers often order many different sizes or designs. They plan to return items that don’t fit or don’t fit without hesitation. In fact, if returns are inflexible, users will leave for another store/platform.
The US National Retail Association said total returns in this country will peak at more than $800 billion in 2022, before falling to more than $740 billion in 2023. This loss does not include shipping fees, labor and related logistics stages.
Data source: National Retail Federation (NRF)
From an environmental perspective, returns are often left to delivery companies, causing increased carbon emissions in shipping.
The amount of emissions from online returns is alarming when considered from the perspective of product classification, especially garments, which have to travel thousands of miles before reaching customers. When those items return to the original distribution center, the carbon emissions from the product’s journey can double or even triple.
The Digital Economy Report of the United Nations Conference on Trade and Development (UNCTAD) 2024 shows that e-commerce returns in the US cause 14% more landfill waste compared to traditional channels, estimated estimated to emit 24 million tons of CO2 (data from Optoro for the years 2020, 2022).
Packaging waste is another environmental consequence to take into account. When a product is returned, the product packaging including box, shockproof plastic wrap, tape, label… are mostly disposable goods. In many cases, customers are required to pack the item when returning the item. These moves all increase the amount of waste already generated from the original shipment.
One of the most difficult environmental impacts to assess is the final journey of a returned product. Shoppers assume that returned items will be put on shelves (in physical stores or on e-commerce platforms) for resale. This is also the expectation of stakeholders but in reality it is not like that.
In many cases, returned goods cannot be sold due to damage during shipping, seasonal characteristics or economic efficiency when the cost of inspection and packaging exceeds the resale value. These products are often discarded, sent to liquidation at dirt cheap prices, and many end up in landfills.
CleanHub reports that in 2022 alone, companies sent more than 4.7 million tons of products straight to landfills. This move saves labor in getting returned products back into circulation, but at the expense of the environment. With the rise of fast fashion, clothing returns alone emit emissions equivalent to 3 million cars in the US.
There is still a solution to balance sustainable development and growth in e-commerce. Ms. Sylvia Ng – CEO of Canada’s ReturnBear return network – said that optimizing return shipping routes, keeping returned products for resale right in the buyer’s market, consolidating shipments and authenticating Returns from the beginning of the return journey improve customer convenience while reducing retailers’ costs and emissions.
From a macro perspective, the report of the United Nations Conference on Trade and Development said that it is necessary to minimize the return rate for e-commerce to develop sustainably. Banning free returns can help prevent unnecessary returns and reduce environmental costs. The UN trade body also recommends that governments consider banning the destruction of returned, unsold and overproduced products, promoting the reuse, repair and renewal of products. product.
“There needs to be a policy forcing online shopping platforms to provide sustainability reports, including details on the quantity, type, location and volume of products being destroyed, ensuring transparency and enhancing accountability.” industry explanation”, the report recommends.
E-commerce platforms and sales companies may consider imposing nominal fees or limiting the number of returns within a certain time period. They can also provide comprehensive information about the product (many customers return due to insufficient access to information), or invest in technology to let customers experience the product in virtual reality, reducing return rates. customers from the product selection stage.
“Maybe it’s time we create and enhance the role of a position called ‘Returns Manager’ in e-commerce,” Ms. Sylvia proposed. This role will increase focus, presence, and control throughout the returns lifecycle with complex return logistics chains.
CEO ReturnBear believes that with dedicated oversight, appropriate multi-party cooperation, and a focus on post-sale product stages, we can create a future where the convenience of online shopping goes hand in hand with Committed to protecting the planet.