Table of Contents
Introduction: The Double Whammy of Returns
Online shopping is order of the day and therefore product returns are also becoming frequent. Although returns may appear to be a convenient option for consumers, they have a number of consequences for the environment as well as for the economy. The returns have become a problem that requires immediate solution because it is a double-edged sword.
The Environmental Impact of Returns
Returns are bad for the environment in every way. The carbon emissions from the transportation of the returned items only are dangerous to the environment. Optoro, a technology company that assists retailers with the management of returns has reported that returns in the United States only account for 5 billion pounds of waste and 15 million metric tons of carbon dioxide emissions every year.
Additionally, the items that are returned are likely to be thrown away in the landfills, which also affects the environment negatively. However, a majority of the materials used in these items are not biodegradable and may take years to compost. The effects of returns are not only in the transportation and disposition of the items but also in the production of the items that will replace the returned ones.
The Economic Cost of Returns
However, returns also have certain costs. Retailers also have costs associated with the processing of returns, re-ringing items, and shipping them back to the warehouse. According to CBRE, a real estate services company, the cost of returning products in the United States alone is estimated to be $50 billion annually. In addition, returns can also negatively affect the top line for retailers. It is a known fact that products that are returned can rarely be sold at the original price and, in most cases, the retailer has to sell the products at a discount to empty the shelves. This may result in reduced profits and the company’s value.
The Rise of E-commerce and Returns
The e-commerce has been one of the major factors that have led to the increase in returns. It has made online shopping easily available to consumers and, at the same time, has made it easier to return purchases. According to the report by Narvar, a software company that assists retailers with their return processes, 30% of online purchases are returned while only 8.89% of in-store purchases are returned. Furthermore, the availability of the online shopping has also resulted in the increase in the spontaneous buying and returning of the products. This results in increased returns as consumers are likely to select items and purchase them without fully understanding the item or their need for it.
Solutions to Reduce Returns and Their Impact
There are several measures that retailers can put in place in order to minimize the effects of returns. First, product descriptions and images can be enhanced to ensure that consumers make correct selections of products that are suitable for their use. Retailers can also provide virtual try-on services or size charts to help the customer select the product they require. Another way is to enhance the quality of the products so that the probability of defects or damage is minimized. It is also possible that retailers can offer repair services or guarantee to encourage customers to keep the products rather than asking for a refund. Furthermore, the retailers can go green by using environmentally friendly packing materials and by working with organizations that either recycle or find new use for the returned products. This can help to reduce the environmental effects of the returns and support the concept of a circular economy.
Conclusion: The Need for Sustainable Consumption and Production Practices
The phenomenon of returns is becoming a big problem and it needs to be solved now. The effects of returns on the environment and the economy are huge and therefore, the retailers should consider green strategies to minimize the effects. The role of changing consumer behavior in decreasing returns cannot be overemphasized.
It is therefore important to adopt sustainable consumption and production approaches in order to address the returns problem and move towards a circular economy. In this vein, it is possible to argue that retailers and consumers should act in conjunction in order to minimise the adverse effects of returns on the environment and the economy.
