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New Report: The Huge Environmental Impact of Online Returns

New Report: The Huge Environmental Impact of Online Returns

A new report has just been launched by CleanHub highlighting the massive impact that online shopping returns have on the environment. While buying products online is easy and convenient, and with 49% of retailers offering free returns to attract customers, our planet is paying the price. 

Key insights:

  • On average, customers return up to 30% of products bought online, with up to 24 million metric tonnes of CO2 emissions attributed to ecommerce returns each year.
  • Online shopping leads to almost three times as many returns as store purchases, creating substantially more emissions and waste through delivery and packaging.
  • In 2021, returns accounted for an average of 16.6% of total U.S. retail sales – a cost of $4.583 trillion – an increase of 6% from 2020.
  • In 2022 alone, retailers sent over 9.5 billion pounds of returned products straight to landfill, as it’s more cost-effective than reselling.
  • Exacerbated by fast fashion and ‘wardrobing’, the fashion industry recorded the highest returns, with customers sending back up to 40% of garments. Fast fashion returns alone release the same emissions as 3 million US cars.
  • According to US consumers, the most returned items were clothing (26%), bags (19%), shoes (18%) and accessories (13%), consumer electronics (11%), and food and beverages (11%).
  • 66% of customers want to shop more sustainably, suggesting companies should start improving returns processes to build a more positive customer experience.

The report looks at the impact of online returns by three stages: Transport and Logistics, Excess Packaging, and Products Ending Up in a Landfill.

The transport phase typically adds up to 30% to the emissions of the initial delivery, and processing them can take up to three times the initial delivery time. Return parcels often travel internationally to reach their destination, greatly adding to the 3% of overall emissions the Shipping industry creates.

In regards to packaging, while online shopping generates 4.8 times more packaging waste than brick-and-mortar stores, returned products often require extra plastic or cardboard that contribute more waste. 

Problematically, some retailers provide returns guidance that uses extra packaging materials. For example, Shoppee states that if the original packaging is damaged, “securely tape the products and wrap them with at least 1-2 rolls of bubble wrap.” Once returned to warehouses, the unwrapping, processing, and re-packaging of products for resale creates even more plastic waste – 91% of which ends up in landfills.

A growing trend of warehouse processing teams is to simply discard items that are too costly to re-sell – it’s estimated returns cost US retailers $816 billion in 2022. With the current rate of returns – especially during holiday seasons where up to 1 million returns are made daily – it’s easier to throw them away, resulting in 9.5 billion pounds of returns being sent straight to landfills.

Discarding depends on the industry, with fashion being one of the biggest culprits – the average return rate for clothes is 32%

Customers who try on clothes make it difficult to resell the items, meaning they often get disposed of in landfills. As clothes are also increasingly being made with cheap materials, like polyester, these emit plastic particles that pollute the environment even more. In some cases, returned products don’t even make it to landfills. There are a growing number of open-air dumping sites, such as in Chile’s Atacama Desert. More than 741 deserted acres have reportedly become clothing junkyards.

The report also looks at the sustainability of online shopping versus shopping in stores. While it’s been found that traditional shopping contributes to twice as many emissions as online shopping, there’s a higher volume of returns derived from online purchases. The percentage of returns from online purchases varies by industry but can be as high as 40%, whereas returns account for just 5-10% of all in-store purchases.

When it comes to emissions, returns amount to a much more significant part of the ecommerce industry at 25% of its total emissions. This compares to just 7% of emissions linked to returns for in-person stores.

Lowering the impact of online returns has to come from both consumers and businesses. Just 20% of products are returned due to damage – meaning the vast majority are for other reasons. With 66% of customers surveyed in 2023 considering sustainability when shopping, this should extend to considering items for return and if they can be kept in circulation, understanding company return policies and ESG commitments, avoiding damaging trends such as wardrobing and multiple size purchasing, as well as buying higher quality, more durable items. 

For businesses, optimizing return processes and educating customers about the impact of returns isn’t just good for the environment, it’s also a good financial move as 91% of businesses are experiencing the rate of returns grow faster than their revenue. Clearly explaining to customers how to reuse packaging for returns, swapping plastic packaging for more sustainable materials, or reducing the size of packages can be more effective in the long term. 

Incentivising consumers also helps change purchasing habits, such as charging customers for returns – a trend that continues to grow. 31% of retailers charged customers for their returns in 2022, rising to 40% in 2023. Coupled with adopting technology such as ‘virtually trying on’ clothes, this can help turn the environmental impact of online returns.

Please read the full report here:

CleanHub’s Vice President of Marketing, Nikki Stones, commented:

“Online shopping is convenient for everyone – especially when it comes to returning products – but it’s so easy for people to overlook how harmful it can be for the planet. This also isn’t talked about enough, meaning most consumers aren’t aware of how much waste their online returns create or how they contribute to carbon emissions – not to mention the amount of returned products that go straight to landfill.

Although more people are becoming aware of how their shopping habits can make a difference, brands need to be doing more to lessen the impact of returns. Whether it’s reducing the amount of plastic packaging, electrifying their delivery fleet, or even finding ways to cut back on returns altogether, companies should be more active in reducing the impact of their ecommerce.”

About CleanHub:

CleanHub is a global startup that uses technology to prevent plastic from reaching the sea by implementing waste recovery where there currently is none. Partnering with hundreds of brands, CleanHub uses funds to collect ocean-bound plastic from vulnerable communities, using its trash-tracking technology to provide real-time evidence of collection.