The convenience economy: Product flows and GHG emissions of returned apparel in the EU

During the 2022 holiday season, US consumers sent more than one million products back to sellers each day. Though many consumers view returns as critical, few seem to realize that returned products do not go right back to the shelf. Instead, returns need to be transported, sorted, checked, and sometimes mended or cleaned- a relatively complex and expensive process which cost US retailers over $800 billion. A challenge across all sales channels, returns are a particularly thorny issue in eCommerce where in some product categories, up to 40% of items bought are returned. These high rates of returns are in part due to the greater uncertainty of buying products online, as consumers cannot feel or try the products prior to ordering. The economics of returns are especially challenging for cheaper items including fast fashion where one company reportedly spent $530 million on returns from sales worth $500 million. To ‘cut losses’ retailers often prefer to donate, recycle, or simply dispose of returned products altogether although these are mostly new, unused perfectly functional items (not to be confused with products at the end of their service life).

While this may make economic sense, from an environmental perspective disposing of functional products means forfeiting the potential utility they could provide, and squandering the materials and energy invested in their production. Relying on data covering over 600,000 apparel items returned to leading brands in the European Union, the authors quantify the impact of returns from a full lifecycle perspective. This perspective analyzes emissions from the product’s production, distribution, return, and reuse, recycling, or disposal. The results show that 22-44% of returned items never make it to another consumer. Moreover, the greenhouse gas (GHG) emissions associated with the production and distribution of products that, once returned, never reach a second consumer can be 16 times higher than emissions from post-return transport and logistics.

Critically the results raise concern about the environmental impacts of ecommerce, where returns are exceptionally high and systemically underestimated. The findings also illustrate that returns create a unique form of overstock – new products that sellers find too costly (or complicated) to resell. Incorporating returns into environmental evaluations of the retail sector and adopting sustainable return management strategies can help tackle these issues and enable product life extension. Ultimately, this research highlights the urgent need to adopt return management strategies that seek to minimize the number of returns diverted to end of life.