The British fast-fashion e-tailer seems to be following in Zara’s footsteps after the Inditex-owned label earlier this year instituted a 1.95 pounds ($2.32) for items customers return through a third party. Large-footprint chains like Uniqlo and Next have also slapped fees on returns. Now Boohoo is sticking customers with a 1.99 pound ($2.37) fee for each return delivery as of July 4.
It’s hardly a secret that returns have long been the thorn in retail’s side. Retailer book a sale when an item is sold, but then run the risk of trying to sell returned items they might have to discount. Any markdown would mean a lower sale price and lower margins on items customers decide they don’t want. Online retailers could suffer a huge hit to margins if they’re also absorbing shipping and return costs.
And just as Zara’s constituents took to Twitter to unload on the returns imbroglio, Boohoo’s consumers similarly took to their keyboards to voice their opinions.
Boohoo’s clothing quality is “so bad you constantly have to order several sizes to find out which fits,” one Twitter user wrote. “Pretty poor for them to add a returns charge when 90 percent of their orders get returned.”
Returns surged at many fashion retailers when homebound consumers took to online shopping during Covid and indulged in the habit of ordering multiple sizes to figure out which ones they’d keep. While Zara doesn’t charge a fee for in-store returns, digital-only retailers such as Boohoo don’t have that option.
Not all of the Twitter comments directed at Boohoo’s new policy were negative. Another user said more companies should take a cue from Boohoo. “People are too quick to order and return stuff they don’t need and want but will order them anyway,” the user tweeted. “I do think the permanent answer is banning serial returners.”
In fact, a new survey from Narvar suggests that some customers might have a more nefarious intent in mind when it comes to returns. The study suggests that some consumers are either actively trying to game the system or take advantage of loopholes in return policies. Of the 2,100 U.S. and U.K. shoppers surveyed, 60 percent said they bent the rules out of convenience, while one-quarter of those surveyed said they take advantage of returns policies for monetary gain by falsely claiming that an order was damaged or missing. One-quarter of the respondents also admitted to purchasing items to wear once or twice with the intention of returning them afterward.
Fang Cheng, founder and CEO of Linc, a customer experience automation platform, isn’t convinced that return fees are the answer.
“I do anticipate that some retailers will also start adding charges for online returns, from an environmental standpoint, but they should definitely be careful, as they would be lowering their customer loyalty rates,” Cheng said. “When customers know that they can get their money back easily, they’re more confident to shop with an unfamiliar merchant and spend more.”
Cheng said retailers should strategize their returns process to drive loyalty and retain customers. Brands should look to develop best practices to reduces losses from items that are sent back, she add ed, which is why charging for e-commerce returns might not be the best idea.
“Retailers should examine the upside of returns and the overall customer experience as revenue and retention drivers. Plus, creating an optimum customer experience decreases the likelihood of returns from even occurring,” Cheng said. “When a customer has meaningful interactions with a brand, they are more likely to become customers for life.”