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The Environmental Impact of eCommerce Returns

Understatement is an underwear brand that empowers women

More and more brands are stressing the need to reduce their carbon footprint, but few companies realize that returns play a big part in the environmental impact of running an e-commerce business. When brands claim that they offer free shipping and returns, they’re not just trying to attract customers but also trying to keep them. Satisfied customers are more likely to buy from the same company in the future, and these perks can help generate brand loyalty. However, before you decide whether to offer free shipping and returns, consider this perk's impact on the environment.

In this article, we will go through an in-depth exploration of the environmental impact of returns. We’ll tackle how brands can raise awareness of the alarming problem and encourage their customers to buy responsibly. On top of that, we’ll also address how a return management platform can help reduce returns and, consequently, lessen the company's environmental impact.

How do ‘free returns’ impact the environment?

Unfortunately, returns are a huge source of waste in our world, and they’re also expensive for companies— returns in the United States alone account for around $260 billion in lost revenue annually. The price of free returns is paid for by planet Earth, which has to deal with the environmental impact of all this excess packaging, wasted resources and unnecessary transport.

What are the main environmental problems caused by ecommerce returns?

Today, ecommerce returns have become an ingrained part of the retail process and are used by many retailers to boost customer loyalty and retention. While aiming to increase loyalty is a good strategy, brands need to understand at what cost it comes. It is estimated that 3 billion kilograms of waste are generated through ecommerce returns, caused mainly by carbon emissions, packaging waste and overproduction.

What can brands do to alleviate the environmental impact of ecommerce returns?

If an item gets returned, it means it was shipped out unnecessarily—from the brand’s point of view, it’s a waste of resources and energy. Sustainability has become a substantial value for many brands in the last few years, which goes further than consciously producing. Many have started implementing more sustainable actions for the return process, from effectively communicating their return policy to finding ways to reduce returns. Let’s look at some examples and activities your brand can take to alleviate the environmental impact of ecommerce returns.

Provide all the necessary information

Suppose your brand is looking for ways to be more environmentally friendly during the return process and reduce unnecessary returns. In that case, you must share as much information on all your products, such as sizing chart, colours, materials and customer reviews.

Take this example from Swedish brand, Houdini, displayed on their Returns & Exchanges page, which encourages customers to re-think twice before buying something and gives them the chance to reach out via their communication channels to ask questions.

The rate at which we buy and return items encourages unnecessary consumption, transport and packaging involved causes a lot of CO2 emissions. We kindly ask you to please continue to place your order consciously as we offer free returns to make it easier for you to get access to the right product. Not sure what size, style or colour suits you best? We’re here to help you make the right decision, the first time. Don’t hesitate to reach out on social media, email or phone - we always love hearing from you.

Product information should be enough to help customers with questions in most cases, but some others might require extra help. Opening communication channels, such as a chatbot on the same website, Instagram DMs, email or phone, is another option to give a more personalised experience to the customer and provide more extensive information to help them decide on one product or another.

On the fourth episode our in-house produced podcast, yaylive, the loyalty podcast for DTC brands, Louis, Senior Strategic Partner Manager at Gorgias, shared that opening a chat bot on your brand’s site for a few hours a day or a week can also be a good way to help out customers with questions. This way customers know when they’re able to communicate with the brand and the retailer is able to, not only talk to customers directly, but also, do so while providing a personalised customer-centric experience that boosts customer loyalty graciously.

“What you can do is to open your chat for 2 hours every day on your website. You can add a message that says 'from Monday to Friday from 2 p.m. to 4 p.m. the website chat will be open for customer requests'.” — Louis, Senior Strategic Partner Manager at Gorgias

Make it clear and explain why you don’t offer “Free Returns.”

Offering free returns is not a must; it’s an option that many factors can determine. If your brand doesn’t offer free returns, carefully explain the reasoning behind the choice and make it visible through different parts of the buying and post-purchase journey. Your customers will appreciate it and won’t be surprised when they see that returning something that didn’t meet their expectations will cost them money.

See this example from Swedish brand Rodebjer, on their Shipping and Returns page, where they warn customers in time of the extra fee to process a return.

When shopping online, please be conscious of your consumption. Processing returns has an environmental impact and Rodebjer considers free returns to be an unsustainable cost. Hence a fee, when returning pieces bought on rodebjer.com will be added. This added fee is a small step for Rodeberg to limit direct climate effect.

When possible, encourage in-store returns/exchanges.

If your brand happens to have a physical shop, encouraging local customers to return or exchange at the store is a win-win for everyone, the brand, the customer and the environment. With an in-store return process, the customer interacts personally and directly with the brand, which doesn’t happen to the same degree online. The brand gets to create a much more personalised experience for the customer, not only through the return process but also by allowing them to exchange a product on-site easily and with the chance to try it on. With this process, there’s minimal environmental impact, and the customer leaves with a positive brand experience that surely boosts customer loyalty.

Implement a return management software

While communication can play a big part in encouraging customers to buy consciously to prevent returns, having a return management software, like yayloh, can be the cherry on top. yayloh is the loyalty-first return management for ecommerce, especially DTC brands, that allows retailers to seamlessly manage returns and reduce them by analysing return data provided by customers through a digital return form.

Understanding return data allows you to see and thoroughly analyse return reasons to spot product issues. When a particular reason is often chosen as a return reason, it can indicate a product malfunction to be solved to prevent future returns. On top of that, the return process powered by yayloh is entirely digital, so there is no need to add pre-printed return labels to all purchases as customers can process their returns through a self-service digital return process.

The bottom line is that while the rise of sustainable fashion and e-commerce is undoubtedly a good thing in many ways, the industry must address this pressing issue. More work needs to be done by all brands to encourage customers to buy consciously and take all necessary actions to avoid returns as much as possible. Businesses with a robust return management software have found incredible success. They have reduced their carbon footprint, and resources spent on handling returns are now allocated to delivering value to the customer and bolstering the bottom line.

"yayloh return management platform streamlines operations, saving our team hours of manual work."

Lucie Hanon

Head of Growth, ANJA Paris

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