£1.6 billion cost of fashion returns


Analysis from returns specialist ReBound points to the fashion sector having been impacted by a £1.6 billion cost resulting from returns generated by  Black Friday sales. The figure including other merchandise verticals is likely to be as much as £2.4 billion as the free shipping/free returns policy adopted by many online retailers is fuelling rampant over-ordering which is promptly followed by a very high percentage of returns.

The trend underpins why retailers should treat the management of returns with the urgency placed for their original order despatches according to ReBound. This is in order that retailers are able to track, then check and return the majority of returned items back into livestock whilst demand is still strong. Leaving processing until January, as was usually the norm, means that the opportunity for re-sale at the already reduced Black Friday price is limited and that margins are going to be even more deeply eroded. With virtually the whole high street on sale for the run up to Christmas, many items will be selling at less than their true procured cost this year as few retailers are holding their prices.

Unsurprisingly, it is not now uncommon for consumers to order multiple fashion items simply to be able to try them on at home, take photographs for social media, and then return them. They have actually been encouraged to do so by the no quibble money back offers and the zero cost of two way shopping. Some retailers have already begun to impose limits on the number of items ‘rogue’ “customers” can order,  or even ban certain consumers completely from ordering due to their blatant abuse of the goodwill extended to them.

At one large North West located fast fashion business it was shared with us that as many as one in two items ordered are being returned, often soiled with cosmetics or fake tan by consumers who have no qualms about screwing items up to stuff them into the packaging they came in.  It actually costs this business less to dispose of soiled and otherwise abused garments and to issue a refund, than it would to return them to saleable condition or take issue with the customer. Something has to give.

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