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The holiday season will soon be over, but the busiest time of the year for product returns is just beginning.
The National Retail Federation estimates that 17% of holiday purchases will be sent back this year. More retailers are reporting extended returns windows and increased holiday staffing to handle crowds this year.
A major driver for returns is uncertainty. When we shop for other people, figuring out what they want is a bit of a guessing game. Return rates are higher on online purchases because it is harder to find the right size and color when you are only looking at images on a screen.
“Clothing and shoes, as you can imagine, because fit is such an important criteria, they have a higher rate of returns,” said Saskia van Gendt, chief sustainability officer at Blue Yonder, which sells software designed to improve companies’ supply chain management.
The returns come with an environmental cost, but consumers and companies are doing a lot to reduce it.
effect of returns
If a company sells something, it’s probably packaged in plastic. Plastic is made from oil, and oil production produces emissions that warm the planet. If the thing is purchased online, it is put on a plane or train or truck which usually uses oil-based fuel.
If you buy something and return it, most or all of the item is refunded.
And once those products are returned to the retailer, they may be sent to a refurbisher, liquidator, recycler, or landfill. All these steps require more travel, packaging and energy, which ultimately translates into more emissions. Joseph Sarkis, who teaches supply chain management at Worcester Polytechnic Institute, estimates that returning an item increases its impact on the planet by 25% to 30%.
About a third of the time, those returns don’t reach another consumer. Because often, it is not worth reselling.
If, for example, you get a phone, but you send it back because you don’t like the color, the seller will have to pay for fuel and equipment to get the phone back, and then pay for labor to assess whether it has been damaged since it left the facility.
“It could be quite expensive,” Sarkis said. “And if you send it to a new customer and the phone is defective, imagine the damage to your reputation. You’ll get another return and you’ll lose a customer who is unhappy with the product or the materials. So companies are hesitant to take that chance.”
Something as expensive as a phone can be sold in the secondary or refurbished market. But that $6 silicone spatula you got from Amazon? Probably not worth it. Additionally, some items – think bathing suits or bras – are less attractive to customers if they have the potential to be resold. Companies know this.
And this is where the cost of returns is more than just environmental – and consumers have to pay. Even free returns aren’t really free.
“Refurbishing, inspection, repackaging, all of these things get added to the retail price,” said Christopher Fairs, assistant professor of logistics and supply chain management at Georgia Southern University.
What can consumers do about it
If you want to reduce the impact of your returns, the first step is to increase your chances of reselling them. Be careful not to damage it and reuse the packaging to send it back Cardiff University Logistics and operations management lecturer Danny Zhang.
If you have to return something, do it quickly. That ugly Christmas sweater you got at the white elephant office party has a better chance of selling on December 20th than it does on January 5th. Zhang said storing that sweater once the season is over isn’t worth the cost to the company.
Another tip: In-person shopping is better than online because the returns on purchases are lower, and in-person returns are even better – because those items are resold more often. This reduces landfill waste, Zhang said. Sarkis said this reduces emissions because companies with brick-and-mortar locations are spread across the country and are closer to consumers and thus move goods over shorter distances.
“If I can return to the store, I will definitely return,” Zhang said. “Managers can get that stuff back on the market as quickly as possible.”
Obviously the best thing consumers can do is minimize returns. Many shoppers engage in “bracketing behavior”, or buying multiple sizes of the same item, keeping the one that fits and returning the rest.
“This behavior of bringing dressing rooms into our homes is not sustainable,” Faires said.
If you’re shopping for someone else, you might also consider picking up a gift card, taking the guesswork out of the equation.
“I know we really want to buy something nice to express our love to our friends or our family. But if we’re more sustainable, maybe a gift card would be much better than just buying the product,” Zhang said.
What can businesses do about it
Sarkis wants companies to provide more information in product descriptions about the environmental impact of returning an item or how much the purchase price factors into return costs.
“But I don’t know whether they want to send any negative message or not,” he said. “If you’re telling someone to stop something because of negative consequences, that’s not going to sell.”
Both Sarkis and Zhang say imposing a fee for returns would help. already Amazon In some situations customers require payment.
On the technology side, Blue Yonder’s recent acquisition of Optoro, a company that provides returns management systems for retailers and brands, uses a software to instantly assess the condition of returned products and route them to stores where they are most likely to be resold.
“By further digitizing that process, you can quickly assess the situation and put it back into inventory,” Van Gendt said. “So this is a great way to avoid landfills and all the carbon emissions associated with that.”
Clothes are often returned. Many sizes do not reflect specific measurements, like women’s clothing, so they vary greatly between brands. Zhang said the better shape could help reduce the need for returns. Additionally, Sarkis said that more 3D imaging and virtual reality programs could help customers be more accurate in their purchases, which would save some returns.
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