Written by Sophie Benson

Affordable fashion brands across the spectrum are attempting to change the trajectory of fast, furious and frivolous returns from their customers. Could it be that charging for online returns could be the death of fast fashion?

If you feel like you are forever queuing at the post office, re-wrapped parcel in hand, or waiting for a courier to collect your returns, you’re not alone. Shoppers are returning more clothes than ever.

“Around January is when you normally see returns peak,” says Kayla Marci, a market analyst at the global retail intelligence company Edited. “You have that golden period where you’ve got Black Friday, Christmas and Single’s Day when there are all these sales and people are purchasing more.” But this year, according to a report by the company, the returns just kept coming, reaching a two-year record of 18.96%. That’s across the board for fast fashion, sportswear and luxury. For fast fashion, returns rates can be as high as 30%.

“I seem to return nearly half my orders nowadays,” says one shopper, while another says she makes returns “all the time”. Recent research shows that Gen Z consumers are driving the trend, as three-quarters of them buy online every month, purchasing an average of three items at any one time, and then returning two.

Now, fast fashion brands are starting to feel the pinch. Asos has warned that its profits could drop from £190 million to £20 million this year as a result of the phenomenon, while Boohoo’s profits have slumped by 94%.

The reason for such high levels of returns? Like most things these days, much of it can be attributed to the cost of living crisis. Customers are still buying around the same volume, with the average amount of items per order only dropping from 2.91 to 2.88, but it’s the realisation of how much things cost in the cold light of day that’s causing them to think twice and make returns.

Sarah* describes herself as a recovering fast fashion addict. “The rush I get when I make a purchase is still something I struggle with, but more and more often I’m getting buyer’s remorse. I’m more critical of my spending. If I’m not going to wear it, it doesn’t fit or if I don’t actually need it, I have to be honest with myself and send it back,” she says. “That £25 or £30 would be better spent on petrol for my car or stashed away into savings.”

Marci agrees. “Fashion is kind of a nonessential, and shoppers may regret it when they need extra money to spend on groceries or gas,” she says. There’s no doubt that the spike in the cost of living is a major factor; even fast fashion bosses are admitting as much. However, there’s another reason that’s been lurking in the background for years: sizing.

“If it’s an outfit for a special occasion like a wedding, I’ll order a 20, 22 and 24 because I don’t want to be caught out,” says Sarah. This is known as ‘bracketing’, and it’s an increasingly popular way to get around a lack of physical stores in which to try on different sizes. During Covid, when loungewear reigned, this wasn’t as much of a problem, but now, Marci explains, more “size intensive” categories like jeans and party dresses are topping shopping lists. There’s not as much leeway in those items as there is in a pair of stretchy joggers, so the right fit is key.

To tackle this, brands have piloted everything from AR try-ons to personalised sizing recommendations over the years, but the technology just isn’t being rolled out widely, likely because it’s so costly. However, in refusing to make finding the right fit easier, brands are causing themselves a lot of work. “When looking at e-commerce returns, every single return has to be processed individually. They have to be opened and inspected, judged whether they can be resold or listed back online. It’s super time-consuming,” says Meagan Knowlton, director of sustainability at reverse logistics company Optoro.

It’s also costly to try to recoup some of the costs. Brands like Zara and Boohoo have introduced returns charges, which is positive news if it makes consumers more conscious about buying – reducing waste and emissions – but it’s not great for customer loyalty. “Our statistics show that customers are more likely to shop or continue shopping with a brand if they have an easy and convenient returns policy,” says Knowlton, noting that investing in better logistics like drop-off points, dedicated returns portals and label-free returns would be a wiser move. The importance of making returns more seamless becomes clear in the replies to fast fashion brands’ tweets, which are full of frustrated shoppers asking where their refunds are or if their parcels have even been received.

Brands could also use rising returns as an opportunity to learn, understanding what categories are being returned and what the reasons for returns are, for example. However, Knowlton says much of this data is simply lost in the convoluted returns processes she described.

Instead of learning and refining, fast fashion brands are making more products than ever. Marci explains that across the UK and the US, 4 million individual new products have been introduced online to date this year. That number is up 11% from last year and doesn’t account for all the different sizes of each new style that are made. 

Fast fashion brands are known for being reactive, but up against the tide of returns, they’re floundering. Cost is almost always the leading factor for people buying fast fashion, and because the clothes are so cheap the margins brands have to work with are tiny, so churning out more and more at great cost, when people are literally queuing up to make returns simply doesn’t make sense.

Speed and convenience tend to be next on the list of purchase factors. But if consumers are constantly faced with making multiple returns that take a great deal of time and effort, with a charge thrown in plus a wait to see the money back in their bank account, then loyalty tied to those drivers will undoubtedly wane.

Unless fast fashion brands adapt, and quickly, returns will only continue to rise along with the cost of living, and profits will only continue to plummet. It’s do or die. 

Images: Getty; courtesy of brands

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