E-commerce’s Hidden Threat: 44% of Returns Never Resold

Currently, almost all product categories are ordered online, and the global e-commerce market is expected to reach 10 trillion dollars by 2030. While online shopping is presumed to have a lower carbon footprint compared to traditional brick-and-mortar retail, this only holds true if goods are not returned. The ecological impact changes dramatically when items are sent back, as reported by Die Presse.

Returns are a significant challenge for the e-commerce sector, especially regarding environmental impact, emphasises an international research team from Ben-Gurion University of the Negev.

Returning goods is a common part of online shopping, with the average return rate reaching 20-30%, much higher than in physical shops (10%). The problem is particularly severe with clothing, which is returned because it doesn’t fit or doesn’t meet expectations.

The study points out that many consumers are unaware that returned items don’t automatically go back on sale. Instead, these products undergo a rigorous process of sorting, checking, and often cleaning, repairing, and repackaging. The costs associated with this process can sometimes exceed the product’s sale value.

As a result, many returned products are sold at a discount, thrown away, or even destroyed without ever being used.

The researchers quantified this problem using an extensive database of 630,000 returned clothing items in the EU in 2021. They found that with current return management practices, 44% of returned goods never reach a second customer. Of these, half are recycled, a quarter end up in landfills, a seventh are incinerated, and the rest are lost somewhere along the way.

The ecological consequences of these unused discarded items are significant, as the resources consumed and greenhouse gases emitted during their production are wasted. It’s estimated that emissions associated with returns management are 4 to 16 times lower than those from producing these products. The researchers suggest that more efficient returns management processes could halve the waste from returned goods.

What can e-shops do to reduce the volume of returned goods? Improving returns management and raising awareness about environmental impact appear to be solutions. By adopting more efficient processes, the industry can reduce its ecological footprint and address one of the significant hidden costs of online shopping.