The end of free returns looms as Zara follows Next with £ 1.95 charge and firms count cost of serial refunders

Fashion retailer Zara has stopped offering customers free returns by post, opening the floodgates for a host of other major chains to introduce charges.

Online shoppers who wish to send back unwanted goods to Zara must now pay a £ 1.95 fee, which the retailer has said it will deduct from the refunded amount.

Zara is part of Intidex, one of the world’s largest fashion retail groups, which also owns chains Pull & Bear, Massimo Dutti and Bershka.

Its updated returns policy states that, from this month, “returns of orders … will have a cost of £ 1.95 that will be deducted from the refunded amount.”

Customers can continue to return or exchange items in store at no cost – but with most Zara branches located in city centers, many people unable to easily access a store will be forced to pay to return goods.

Zara is not the first retailer to do away with free postal returns – Next already charges customers £ 2 – but inflationary pressures caused by factors including increased labor costs, rocketing energy prices and higher transportation costs means a multitude of retailers now stands poised to follow suit, experts say.

H&M refused to rule out bringing in returns charges when approached by i but online retailer Asos – which has felt the effects of “serial returners” on its bottom line – promised to keep returns free.

“Free returns are a core part of the Asos offer and there are no plans to change this approach,” the company said.

Marks & Spencer and John Lewis also pledged to keep returns free for their customers.

But retail expert Chloe Collins predicted many retailers feeling the squeeze will stop offering free returns in an effort to make savings and avoid raising prices.

“I think unfortunately a lot of retailers will be forced to do it because of rising costs. It could become quite widespread, ”said Ms Collins, head of apparel analysis at consulting firm GlobalData.

“When online shopping started generally it cost to place returns, but as online channels became bigger and convenience was essential they [retailers] realized they needed to offer free returns and next day delivery, ”she said.

“Other retailers will definitely be watching to see what the reaction is to what Zara does,” Ms Collins added.

Returning headache

Returns cost British retailers £ 7bn in 2019, according to research from KPMG – and that figure is likely much higher today.

One in three items bought online are sent back, and each return costs businesses £ 20 to process when factors such as shipping, tracking and repackaging are accounted for, according to returns management software company NShift.

A major challenge thwarting many retailers is the practice of “wardrobing” – using or wearing a product and then attempting to return it.

Almost half of the amount of money shoppers spent in 2018 ended up being refunded by retailers, research from Barclaycard found. Customers spent £ 313 on online clothes shopping on average, but they ended up sending back £ 146-worth of their purchases, it said.

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In 2019, Asos attempted to address the problem with a crackdown on serial returners. Announcing an update to its returns policy, the company warned customers that it reserved the right to deactivate the accounts of shoppers suspected of buying and wearing items before returning them for a refund.

“If we notice an unusual pattern of returns activity that doesn’t sit right: eg we suspect someone is actually wearing their purchases and then returning them or ordering and returning loads… more than even the most loyal Asos customer would order then we might have to deactivate the account and any associated accounts, ”it said.

Zara follows Next, Uniqlo and In The Style in charging customers to send back clothes.

Pandemic boom

While many people shopped online for clothes long before Covid-19 hit, the pandemic drove a new wave of consumers to embrace the convenience of home deliveries.

In 2019, only 20 per cent of customers expected the returns process to be free, according to a consumer survey carried out by Rebound Returns, a returns platform that has provided services to retailers including Asos and Charles Tyrwhitt. Fast-forward to 2021 and that number had more than doubled to almost 50 per cent.

The volume of returns leapt 44 per cent from 2020 to 2021, a jump that presents “a huge challenge and a huge cost” for retailers everywhere, the firm said.

Earlier this month, fast fashion retailer Boohoo reported a 94 per cent slump in before-tax profits to £ 7.8m in the 12 months to the end of February. It attributed the figures partly to the number of returns being made post-lockdown as well as increased freight and logistics costs.

What is the environmental impact of sending back clothes?

Zara has claimed it introduced its returns charge for environmental reasons, pointing out that it is more eco-friendly for customers to return items to stores rather than have delivery drivers pick up parcels from regional drop-off points.

When clothes are returned they re-enter the transportation network, essentially doubling the CO2 emissions produced in getting the package to the customer in the first place.

In the US, 15 million metric tonnes of CO2 are emitted from the transportation of returns each year, according to Optoro, a logistics firm.

There is also packaging waste to consider, and on top of that, many returned garments never get resold and are instead sent to landfill.

Rights and wrongs

Despite the crackdown from some companies on serial returners, consumers are entitled to refunds in certain circumstances.

Online shoppers have the right to cancel their order for a limited time even if the goods are not faulty.

Retailers are obliged to offer a refund if customers inform them within 14 days of receiving their goods that they want to cancel. Shoppers have another 14 days to return the goods once they’ve informed a retailer of their intention.

Retailers must refund the customer within 14 days of receiving the goods back – and customers do not have to provide a reason for their decision.

It is legal for retailers to require consumers who send back unwanted goods to cover the cost of the return.

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