Should Zara (and other retailers) charge for online returns? – RetailWire

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May 16, 2022

Zara in the UK has started charging a fee of £1.95 ($2.39) to return goods purchased online. The fast fashion retailer reportedly instituted the charge for environmental reasons.

Zara deducts the refund fee from the refund. Customers who purchase items online can always return them to the store for free. Returns by mail in the United States are always free for 30 days after purchase.

A Zara spokesperson told the BBC“Customers can return their online purchases free of charge to any Zara store in the UK, which most customers do.”

A survey of US online shoppers surveyed by eMarketer last November found only 9% in-store merchandise returns when asked about their most recent return. The most popular return route was mail, cited by 37%; followed by another deposit location (eg, pharmacy, locker), 20%; and returned to another retailer (eg Amazon/Kohl’s), 15%.

Online returns are increasing and are considered a margin killer for selling online. A recent Pitney Bowes survey of US online retailers found that returns cost retailers an average of 21% of their order value. National Trade Federation (NRF) found that 20.8% of goods purchased online were returned in 2021, compared to 18.1% in 2020.

Zara may disappoint customers who are gaining confidence to make an online purchase when they see free delivery and returns. Power Reviews 2021 Returns study found that consumers indicated that free shipping (96%) and free returns (76%) were important considerations when shopping online.

A analysis by parcelLab in early 2021 of the NRF’s Top 100 US e-commerce sites found slightly more than the majority of retailers offered free returns or with a “no need to return” policy. Of the 43% of retailers charging for returns, 59% charged more than $10.

Of those that charge mailed returns in the US, Uniqlo charges $7, Urban Outfitters, $5; J.Crew, $7.50; Lands End, $6.95; and LL Bean, $6.50. Belk and Wayfair customers are responsible for return postage.

Growing environmental concerns may lower consumer expectations of free returns. A recent study from Cycleon found nearly two-thirds (64%) of US consumers willing to pay extra when returning a package to subsidize greener carrier options.

DISCUSSION QUESTIONS: How likely are many retailers to start charging for return shipping? Will US consumers be more willing to be charged for online returns due to environmental concerns or some other factor?

Braintrust

“Zara return costs will be a very interesting indicator.”

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