Cracking the Return Code: Retailers' Sustainability Challenge

We are hardwired to resist change. Change is seen as a threat and presents the brain with three options: fear, fight or flight. Now, I am not saying impending costs for returns would elicit such a strong emotional response but after taking a quick look at twitter, you can see it really rubs people up the wrong way. Costed returns are controversial for two key reasons: they transform a formerly free service into a paid for one (not ideal in a cost-of-living crisis) and they attack a newly established behaviour whereby people are able to shop- buy- return in an endless cycle.

Moving from free to paid for is often alarming to consumers due to a behavioural bias called mental accounting. This is the different value we place on the same amount of money depending on how we earn it, how we intend to use it, and how it makes us feel. If something was formerly free, we haven’t mentally accounted for the new cost or intended to spend our money in that way. This will likely turn consumers away, particularly if it comes as a surprise. When boohoo announced they were charging for returns last year, Twitter had a field day: "Boohoo charging for returns?!?! Goodbye babes," said one disgruntled consumer. This is exactly the kind of response brands recoil from, yet is it really such a bad thing?

Reports have shown that retailers throw away or liquidate approximately 40% of returns, which totals approximately 5 billion pounds of waste every year. With the environmental toil of returns so severe, it could be argued that interrupting the mindless cycle of returns is not only necessary but imperative, particularly when it comes to stopping so called ‘serial returners’ in their tracks. The latter cohort has developed a habit of shop-buy-return that is crippling businesses and negatively impacting the planet but is paying for the service enough to stop them?

When the plastic bag charge was introduced in 2015 there was hope that it would curb people’s passive behaviour towards grabbing new bags at the end of every shopping trip. Although the scheme has been largely successful, reports have emerged of counter behaviour that could override the intention of cost schemes such as return. Studies have proved that money can override guilt during a purchase and therefore reduce a person’s sense of moral responsibility toward the environment. With protecting the environment one of the top reasons for introducing cost returns in the first place, this could prove counterproductive in efforts to stop this behaviour so do we need a more extreme approach?

In May Sweden based fashion retailer Bootz AB blocked 42,000 customers from its site for returning items too frequently. This bold move has reportedly saved the brand approximately 791 tons of CO2 in 2022 and eliminated the need for approximately 600 delivery trucks. Although it might seem extreme, this is an interesting example of flipping accountability back to consumers and forcing them to think carefully about their shopping behaviour.

Ultimately there is no silver bullet for brands when it comes to their return process other than clear communication and a clear position. If brands are able to justify why processes are in place, consumers at least know what they are getting, removing that surprise element and diluting the strong emotions elicited by the change. Change is going to happen; brands just have to be brave enough to lead the charge.

Ella Britton is a strategy director at Behave