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The Hidden Environmental Cost of Returns: Driving Sustainable Change in eCommerce
Learn more about finding sustainable solutions for managing your eCommerce returns.
Generous return policies, while essential for customer satisfaction, have resulted in an exponential spike in returns and are inadvertently fueling a sustainability dilemma. With soaring return rates and challenges in reselling returned items, the planet is paying the price.
A recent UPS Capital report underscores this growing concern, revealing that the vast majority (91%) of surveyed merchants acknowledge the long-term environmental impact of eCommerce returns. As retailers balance consumer expectations with planetary health, finding sustainable solutions for managing returns is imperative.
The Current State of Returns
Over a third of merchants surveyed said they’re currently grappling with annual return rates exceeding 15%. Additionally, 38% of those merchants report their company budgets more than $100,000 for returns annually. This highlights the complexity of returns logistics, which involves not only handling the substantial volume of goods flowing back through the supply chain but also the major costs involved with the process.
Additionally, ‘bracketing’ is on the rise, where consumers purchase multiple sizes or colors of the same item online with the intention of returning the rejected versions. Over two in five (42%) consumers surveyed say they have bracketed their orders. However, merchants think this is a much more common tactic, with 87% of those surveyed believing their customers bracket their orders. This belief was highest amongst luxury (95%) and apparel (92%) merchants.
The Environmental Cost of Returns and Resells
Among the 74% of consumers surveyed who indicated they return at least some of their online orders each year, a quarter reported returning more than 10% of their delivered goods. While most (88%) consumers surveyed acknowledge that online returns have an impact on the environment, there is a lack of awareness of how few returned items are eligible for resell.
A majority (83%) of surveyed consumers believe more than 25% of returned goods can be resold by the retailer. In contrast, a third of merchants surveyed report that more than 25% of returned goods cannot be resold.
With 9.5 million pounds of returns ending up in American landfills each year, these unsold items represent a substantial source of waste – further amplifying the environmental footprint of returns.
An Innovative Solution to Sustainable Returns
Recognizing this growing challenge, merchants are increasingly seeking innovative solutions to enhance their sustainability efforts. A promising approach involves partnering with companies that consolidate returns from multiple brands. This not only reduces shipping costs but also minimizes the environmental impact associated with individual return journeys. UPS Capital research found that luxury and apparel merchants are most interested in this approach due to higher percentages of returns in these sectors.
Exploring avenues for product refurbishment, partnering with resale platforms, and implementing stricter return policies are additional strategies that can collectively mitigate the environmental burden of unsold returns. Additionally, alternate drop-off options like UPS Access Point® locations offer box-free and label-free return options, significantly reducing packaging waste. Ultimately, a multifaceted approach is necessary to ensure the eCommerce industry thrives not just economically, but also ecologically.
Collaboration Is Key for a Green Future for Returns
The future of returns is one of collaboration and innovation, where merchants and technology providers work together to create a seamless and sustainable experience for all stakeholders. UPS Capital is at the forefront of this movement and dedicated to giving merchants the tools and expertise needed to navigate the evolving returns landscape. Together, we can unlock the full potential of returns and thrive in a dynamic and competitive marketplace.
