The Environmental Cost of eCommerce Returns

Each year, 5 billion pounds of waste is generated through returns. The solution? Welcome to the world of reverse-logistics.

Online shopping is becoming more and more popular worldwide, I know because my business we ship globally.

But with this increasing popularity comes an increased environmental impact, as the number of eCommerce returns increases.

While the logistics industry has made substantial efforts to reduce its carbon footprint and become more environmentally friendly, these efforts are often undermined by the growing trend of online shopping.

We all have a responsibility to lead a more sustainable existence and one area which requires action is ecommerce returns and of course fast fashion brands get a bad rep – fast sales, fast delivery, fast returns, and fast use.

Reverse logistics is the process of collecting and aggregating products, components, or materials at their end of life for reuse, recycling, and returns. Reverse logistics plays an important role in the process of companies aiming to transition to a circular economy.

Using Amazon as an example, the vast number of returns received by Amazon every day are costing the company billions – and affecting the planet.

A National Retail Federation (NRF) survey in the US found that a record $761 billion (£584.7 billion) of merchandise was returned to retailers last year.

Although Amazon doesn’t share its returns figures, the NRF estimated that 16.6% of all merchandise sold over Christmas was returned – an increase of 56% from the year before.

In many cases returns can’t be resold, so end up in landfill. This is not only bad for the environment, but also has a financial impact on retailers and ultimately the end consumers.

So, what can be done about this?

Logistics firms like Green Fulfilment are working with companies to reduce the environmental impacts of eCommerce returns by using innovative technologies and sustainable processes.

A study by Accenture of 6,000 consumers in 11 countries across North America, Europe, and Asia, found that while consumers remain primarily focused on quality and price, 83% believe it’s important or extremely important for companies to design products that are meant to be reused or recycled. Nearly three-quarters (72%) of respondents said they’re currently buying more environmentally friendly products than they were five years ago, and 81% said they expect to buy more over the next five years.

It’s not just larger retailers that are feeling the pressure to address their environmental impact, but also start-ups and small businesses.

As the environment continues to be a hot topic and with a hike in energy prices, ecommerce businesses will need to consider and factor in steps to ensure customer returns are reduced greatly.

eBay have just launched a new range, called Imperfects where they sell imperfect designer wear at up to 60% less to prevent good going to landfill.

Whether more companies will follow the lead of eBay and launch similar “imperfect” lines remains to be seen but reducing the environmental impact of ecommerce returns is a key challenge for businesses in today’s climate.