The environmental impact of the wrong return policy.

Every online brand wants to create a simple return process. The more friction that exists, the less likely a customer is to take a chance buying something over the internet. 

A return policy and process that’s often seen as the gold standard of returns is Amazon. Their policy has become known throughout the ecommerce industry for its simplicity and speed for the customer, but does that come with too steep of a price?

The dark side of a return policy that is too fast and too easy

Every year, five billion pounds of returned products and packaging ends up in landfills. As you can imagine, all of this return waste has terrible implications for the environment - not to mention it’s an ineffective use of your brand’s resources.

Five billion pounds of returned products end up in landfills each year.

Customers demand simple and fast returns. But very few are aware of the environmental implications of a policy that is too simple and too easy. To be fair I was not fully aware of the issue until my mom left me a message saying "I recorded a show about your work Alex."

The following video is what she recorded for me from a CBC special tracking Amazon returns.

You likely don't have 20 minutes to watch the full show (although I really encourage you to) so I will summarize it for you. Products were purchased from Amazon, trackers were added, and they were sent back. While some ended up being resold, many of the items were sent to facilities to be destroyed and disposed of by the truckload.

A big thank you to my mom for recording this special about "my work." While I am not directly responsible for Amazon's returns as my mom thinks, I did feel it was my responsibility to put together a blog post on creating the right balance in your return policy.

Striking a balance of sustainable and simple returns

Like most things in life, the right return policy and process is one that creates the right balance of simplicity for your customer and is environmentally responsible. Here is how I would strike the right balance between the two.

Create the right amount of return friction

Creating a customer-centric return policy is Loop's top priority, but when a return is too simple customers will be much more liberal with what they send back. We often call this creating the right amount of friction. You want the process to be easy for those who need to return something, but you don't want it to be so easy that customers send items back unnecessarily.

• Use a return portal rather than pre-printed return labels. Many of the brands that we work with at Loop have seen their return rates drop when they adopt a return portal. Instead of just taking the item back to the post office the customer needs to answer just a few questions to generate a label. This gets the customer to think just that bit more before sending an item back (and you save a ton of paper) with no impact on the perceived experience.

• Incentivize exchanges > refunds. When returns do happen, what’s best for business and the environment is to encourage customers to opt for an exchange over a refund - whether that’s with a strategically placed shipping fee or bonus credit. That way, the customer still gets a product from your brand, but there’s a much higher chance that the item will be returned in top-notch shape and can be resold.

Prevent returns before they even happen

One of the most obvious solutions is to prevent returns from happening in the first place! While it’s unrealistic to expect zero returns, there are ways to significantly reduce the number you receive by identifying and addressing the most common return reasons. This includes actions like providing detailed guidance around sizing, accurately representing the quality of your products, using top-notch photography on your website, and proactively managing logistical problems to ensure customers don’t receive incorrect or damaged items.

Extend the life of your products

Research has found that  43% of shoppers plan to spend more on sustainable brands. As a result, there are an increasing number of eco-friendly brands looking for creative ways to extend the life of their returned products.

43% of shoppers plan to spend more on sustainable brands this year

There are two common approaches:

Upcycling or recycling

Upcycling or recycling ensures that returned products aren’t just being destroyed or disposed of. Instead, either the entire product will be repurposed into a new product, or the raw materials will be broken down and used in another way.

For example, Madewell has an awesome denim recycling program that encourages customers to bring in their used pairs of jeans to the store. In return, they’ll receive $20 for a new pair. Those materials are then recycled and turned into insulation for homes, which are put to good use through partnerships with organizations like Habitat for Humanity.

Selling used items

Instead of sending used items to landfills, some brands are actually owning the used market for their products and giving items a second life. Patagonia is a great example of this. When a customer returns an item, Patagonia prepares it for resale and puts the item on its Worn Wear site at a discounted price. If the item isn’t sellable, the materials are recycled and turned into completely recrafted products, which are also sold on the site.

Donate returned items that can't be resold

Some brands also partner with donation centers or charities that will accept their used products. This is a great approach because it promotes social good but also creates a better experience for customers by allowing more flexible returns.

Brooklinen is a great example of a brand that turns returns into a force for good. Instead of creating return waste, the company donates products that aren’t fit for resale to charities that help the homeless. As a consumer, you still get to return your item and your unwanted bedding is being put to good use by a network of charities across the United States. Allbirds is another brand that donates lightly used or like-new shoes that are returned to their charity partner, Soles4Souls, who then distributes them to people in need.

It’s in your power to minimize the impact your brand has on the environment. Being thoughtful about your returns process from a sustainability standpoint can make a positive contribution to society and increase loyalty to your brand. There are tons of ways to reduce your environmental impact while still providing a stellar customer experience. Get in touch with our team, and we’d love to help.