Straight to the point
Return fees are a controversial topic when it comes to online clothing shopping.
While many shoppers have come to expect free returns, more and more retailers have begun introducing return fees as a way to curb costs associated with processing returns.
The decision of whether or not to charge return fees is not an easy one. There are valid reasons both for and against charging them.
In this article, we’re going to take a look at return fees, the pros and cons of free returns, and what online clothing retailers can do to decrease return rates.
What are return fees?
A return fee is a fee online retailers charge customers to make a return.
Return fees are typically imposed to cover expenses related to return shipping, inspection, and potentially refurbishing returned items before they can be resold.
Retailers argue that return fees help encourage more conscious shopping and contribute to the sustainability of their business model.
Return fees may also serve as a deterrent against customers ordering multiple items with the intention of returning some, a practice known as bracketing, which strains the logistical and financial aspects of online retail.
The problem with returns
In online shopping, returns present a unique set of challenges for retailers. Returns present both environmental impacts as well as severe financial costs for ecommerce business.
The environmental toll
At the very least, returns from online sales double the environmental impact of any sale.
The transportation involved with returns contributes to significantly more greenhouse gas emissions, since returned items must complete the same journey twice.
There’s also the fact that packaging materials, like boxes, are often discarded after the initial delivery and aren’t used for the return journey, leading to increased waste from delivery.
Furthermore, returned items are not always resold and can end up in landfills.
The financial toll
Returns are expensive. They cost online retailers millions of dollars and it’s becoming increasingly difficult to allow customers to make returns for free.
The process of accepting returns from online orders is lengthy and expensive. There’s the costs involved with reverse logistics, as well as the costs involved with having returned clothing inspected.
After inspection, returned garments need to be folded and repacked again – and that all adds up!
In fact, the cost of transportation and labor to process returns, ends up costing businesses about 66% of an item’s original price.
Why more brands are charging return fees
Many brands, like Zara, Abercrombie & Fitch, J. Crew, and H&M, have begun charging return fees.
There are a number of valid reasons to introduce return fees.
Firstly, return fees help shoulder some of the financial burden involved with processing returns.
While return fees are not nearly enough to cover all the transportation and labor costs involved with returns, many brands hope they’ll also encourage shoppers to be more conscious about their purchases.
When customers need to foot the bill for returns, they think twice before purchasing items they’re not entirely sure they want to keep.
Return fees discourage bracketing, a practice that sees customers buying several sizes of a garment and returning the sizes that don’t fit.
Charging return fees also incentivizes customers to join loyalty or membership programs that offer free returns.
Should you charge return fees?
Deciding whether or not to charge return fees as an online retailer needs to be carefully considered.
While offering charging return fees can decrease customer satisfaction, encourage purchasing confidence, and foster brand loyalty, the decision needs to be balanced with the environmental and operational costs associated with the return process.
Let’s take a look at some of the pros and cons associated with offering free returns.
Pros of charging free returns
Decreased financial impact
As we’ve seen, processing returns comes at a cost. Charging return fees can help relieve some of the financial burden of returns.
Reduced return rate
Return fees discourage multi-size purchases and help decrease overall return rates. This is where the benefits of charging return rates truly lie.
Increased membership/rewards program subscriptions
Charging a return fee can be a way to encourage customers to join membership or rewards programs that offer free returns.
Cons of charging return fees
Decreased brand loyalty
Offering free returns for online purchases is a strategic move that significantly enhances brand loyalty.
Customers appreciate the convenience and flexibility of being able to return items at no extra cost, creating a positive and hassle-free shopping experience.
On the other hand, charging a return fee may lead consumers to explore alternative retailers that offer a more accommodating and hassle-free return policy.
Barrier to purchase
Many shoppers are hesitant to purchase clothes online without physically trying them on.
Free returns have traditionally been the way to allow customers to mitigate the risks of ordering the wrong size.
Many shoppers may give up on purchases that can’t be returned for free if they don’t fit.
Returns are the root of the problem
In the best-case scenario, return fees make for conscious shoppers and help brands reduce the financial impact of returns.
But even then, return fees are only the tip of the iceberg. The bigger problem retailers have to tackle are returns themselves!
And the best way to reduce the costs associated with returns is to avoid returns altogether.
Sizing/fit is the number one reason for returns
If retailers want to reduce their return rates, they need to make sure customers purchase the right size.
Of course, there are other reasons customers make returns. But sizing/fit make up between 53% to 70% of returns. So that’s where retailers should focus their efforts.
To pick the right size at the time of purchase, customers need to know the body measurements that correspond to each size, and they need information about how the piece fits.
Size charts are a useful tool and give shoppers relevant body measurements to pick out the right size. But they don’t provide any information about fit and they’re completely useless if the user doesn’t have a measuring tape at home.
To allow customers to confidently pick the right size, size charts should be paired with virtual fitting rooms
How Sizebay can help retailers cut down on returns
Sizebay is a virtual fitting room plugin that gives shoppers personalized size recommendations based on their height, weight, and age.
Increased user experience
Users can quickly decide their size without leaving the product page or taking any measurements.
Personalized size recommendation
Users can adjust up to 8 body measurements to receive size recommendations that best match their body shape.
Fit information
Size recommendations offer information about how sizes will fit, i.e, which sizes will be slightly looser or tighter. This lets shoppers pick sizes that reflect their personal style preferences.
Return fees and returns
Return fees may someday become standard practice as more and more brands introduce return fees.
But even if customers are willing to pay return fees, they’ll of course, be much happier if they don’t have to.
Giving shoppers the tools they need to pick the right size and avoid returns altogether is the best way to keep customers satisfied while also increasing your profits.
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