‘Tis the season for holiday shopping with the upcoming Black Friday and Boxing Day sales, eager shoppers flock to BOGO and limited-time deals while supplies last. The convenience of online shopping, coupled with extended return policies, has fueled a growing trend: bracketing. Shoppers buy multiple sizes or styles of the same item, try them on at home, and return the rest. While this practice simplifies decision-making, it comes at a hidden cost. With average holiday spending projected to reach $972 this year (an 8% increase from last year), and as online sales continue to grow, retailers are grappling with higher return rates compared to when purchases are made in-store. Specifically, online shoppers are more than three times more likely to return items compared to in-store shoppers.
Already, apparel accounts for 23% of online retail sales in the United States and has the highest rate of returns relative to other product types, with 26% of clothing, 19% of bags & accessories, and 18% of shoes returned.
Holiday shopping during Black Friday, Boxing Day/Week and Cyber Monday drive the highest sales volumes - and therefore the highest return rates. During the holiday season, the average return rate for apparel purchased online is around 30%. Following the holiday season, rates for clothing retailers may be as high as 40% or even 50%. During the holiday shopping season, retail return rates increased by 6.32%. Limited time discounts, seasonal promotions, gift-giving traditions, and exclusive holiday collections all contribute to a surge in purchases and impulsive buying.
Returns are a hallmark of the holiday season, driven by buyer’s remorse, wrong sizing/colour/quality, bracketing, or unwanted gifts. But what happens to returned clothes? Contrary to popular belief, most returned apparel is not simply dusted off and restocked to be sold at full price to a hopeful customer who signed up for a “notify me when back in stock” or “join waitlist” emails. Instead, the reality is often far less ideal, and these items rarely end up in a happy new home. For e-commerce retailers, delivery costs, often up to 10% of the retail price, are built into item pricing. However, handling returns—covering transportation, labor, packaging, storage, inspection, and sanitization—is both costly and environmentally taxing. In the U.S., the carbon emissions from returns equal those of 3 million cars, and financial costs can reach 66% of an item’s original price.
When the cost of processing a return exceeds the value of the item, is it really worth it? Returned clothing—whether in perfect condition or not—often cannot be resold, especially if there are delays in shipping, processing, or returns. In these cases, the item is typically discarded, either by being incinerated or sent to a landfill. This is the case for 50% of returns, according to third-party returns platform Optoro, where up to 9.5 billion pounds of returned items are landfilled every year. Worldwide, besides the waste of materials, e-commerce returns account for 24 million metric tons of CO2 emissions each year, which is equivalent to the CO2 emitted by 5.1 million cars in a year.
This also affects unsold items, with luxury brands like Burberry admitting in 2018 to incinerating £90 million worth of clothing and accessories in the past five years to ‘protect its brand’. While they stopped the policy last year after a public outcry, this highlights the wasteful practices within the fashion industry. However, not all hope is lost. In 2020, France banned the disposal of returned and unsold luxury goods in landfills.
From a retailer’s profitable standpoint, some e-commerce retailers have begun changing their return policies and adding surcharges to help recoup some of the cost and reduce online returns (e.g., online purchases at Uniqlo will cost $9.90 + tax to be returned, and must be mailed back). Others, like the Canadian shoe brand Fluevog, have enhanced their online shopping experience by providing detailed information about fit, colour, product features. They also offer live chat support to help customers make informed decisions. Some brands are also piloting virtual try-on tools, which allows customers to visualize the style and fit in real time, further reducing the likelihood of returns.
What can we as consumers do?
Admittedly, some companies are also to blame for unclear pictures, inaccurate sizing and inconsistent quality. However, to minimize holiday returns, consider shopping from brands with clear size guides, doing your due-diligence by checking online reviews, TikTok, Instagram Reels or Youtube videos to get a better idea of their quality and fit. Consider taking the time to second-guess your returns - maybe you can give it to someone else or donate it.
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