Retailer H&M has begun charging customers to return online orders. For customers who are not a H&M Member, a £1.99 return fee per parcel will be deducted from any refund given.
The return fee will not apply to items deemed faulty or incorrect, and will not be apply to the return of goods in-store.
Laura Garrett, Returns Expert at returns management company ReBound, told Logistics Manager :”It’s not always financially viable for retailers to keep footing the bill [for returns].” She explained: “Our data shows returns increased by 26% last year, alongside rising fuel and labour costs.”
Garrett alludes to the model adopted by H&M of offering free returns exclusively to members, adding: “We’ve seen a number of retailers adopt this model for free shipping but extending this to include returns could be a great way to offset the costs of returns.”
Although H&M membership is currently free, the company is able to gain something back – whether it be data or brand loyalty – from making returns cost-free for customers who are signed up as members.
For more on reverse logistics and the cost of returns, check out this feature in the September issue of Logistics Manager Magazine!
H&M isn’t the only retailer to implement return fees; Zara charges a £1.95 return fee and Boohoo charges £1.99 per parcel for non-Premier customers.
Gerry Power, UK Head of Country at supply chain consultancy TMX, said: “Shoppers’ reliance on returns is leading to huge losses for the UK fashion industry – to the tune of £7 billion a year. Retailers are being forced to act, and H&M joins a list of other major fashion brands who have recently changed their free returns model to overcome the crippling cost of online returns.
“The rise of fast fashion has contributed to shoppers’ becoming accustomed to being able to buy and trial new clothes free of charge. This then creates a balancing act for retailers between saving costs and retaining customer loyalty.
“The crackdown on returns makes economic sense for fashion retailers and also helps to reach sustainability targets. However, to keep their online customers and incentivise positive behaviours, retailers will need to consider loyalty programs and other personalised approaches.”
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