Zara has decided to charge its customers a fee for returning orders placed online. Returns management is a logistical headache for e-commerce companies and an environmental disaster.
Returning an online Zara order now costs €1.95. An announcement that may seem innocuous, however, this change in strategy for the world’s first fast fashion brand marks a turning point.
The Spanish brand, founded in France since 1990, has discreetly added a short line to its website stating that all “returns relating to orders placed since April 28, 2022” now have a “value of €1.95 minus refundable amount.”
At a time when big ready-to-wear brands are making free returns as a marketing argument, Zara’s decision comes as a surprise. At the moment this applies only to the Spanish brand, other companies of the Inditex group (Bershka, Pull&Bear, Oysho, Massimo Dutti, Stradivarius) continue to offer costs in case of product returns.
This is also what makes this change in policy surprising. Zara is the flagship brand of the Inditex Group and also the most profitable brand with 2,000 stores worldwide. In 2021, the brand’s turnover amounted to 19.6 billion euros of the 27.7 billion euros received by Inditex. So the group is taking a risk by experimenting with Zara paying return fees.
Logistic puzzle and ecological disaster
But e-commerce companies no longer have a choice as package volume has skyrocketed following the health crisis and the temporary closure of physical outlets.
Managing product returns is a real logistical headache because these round trips multiply short trips and overload warehouse space.
Unlike traditional deliveries, which can be centralized to optimize distribution, returns are often handled individually thanks to pre-printed labels provided upon delivery. The goods are then picked up by a truck and delivered piece by piece to the warehouse. Additional kilometers, which entail costs and a large amount of pollution.
Proving that this process is the goal, Zara charges only for the return of goods to the point of collection. Returning an order to the store is free. The same system at H&M that charges 95 cents for the cost of a return at a relay point, excluding members of the loyalty program.
Lots of drifts
Free returns have been popularized by online fashion giants such as Asos, Boohoo and Shein, who do not have physical stores. A way to seduce consumers who are accustomed to trying on clothes in the salon before buying them.
The German site Zalando goes even further and offers to try before you pay. “You dreamed of being able to taste without counting! This new service allows you to order, receive your items, try them on and only pay for the items you have left,” Zalando boasts.
But the free return of articles breeds drifts. According to Narvar, a return shipping and tracking company, 41% of consumers buy multiple versions of a product to try it out with the intent to return.
Therefore, more and more brands offer sizing guides with accurate measurements to better guide shoppers and reduce returns. Some brands, such as Levi’s, also offer detailed product fitting guides.
In addition, companies are also facing the “wardrobe” phenomenon. A term that refers to buying an item, wearing it without removing the tag, such as to take a photo for social media, and then returning it and claiming a refund.
These practices, logistical and environmental issues are all reasons that could push other brands to follow the lead of Zara and H&M in terms of billing for returned items.