E-Commerce

Will more retailers start charging shoppers for online returns?

Three analysts weigh in on the strategy.
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Francis Scialabba

· less than 3 min read

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Zara shoppers in the UK might be thinking twice before clicking Add to Cart more than once. Last week, the fast-fashion giant started charging its UK customers a fee of £1.95 to return their online purchases—well, if they drop them off somewhere other than its stores. (There, the only cost is time spent in line.)

Now, Zara isn’t the first retailer to make this move, and, according to analysts we spoke to, it might not be the last. Here are their thoughts on the strategy.

👗 Clothes call: “Apparel is where I see a large portion of brands who are having to start charging for returns. A lot of what we return never gets resold. It either goes into a discount environment or gets tossed—it doesn’t always make it back to the retailer in time to be on the sales floor,” explained Claire Tassin, retail and e-commerce analyst at Morning Consult. “When you’re talking fast fashion, there’s a strong chance they’re not going to be able to resell that item. That also has to play into the economics of when it makes sense to charge customers or when it doesn’t.”

👍 Store run: “It is a good strategic move to get people back into the stores. It probably allows people to impulse buy things that they see in the store itself,” said Michael Olaye, VP and managing director of experience community at R/GA. “But it would be clever to do it as maybe on the third return or second return, rather than everybody who chooses to return gets the charge, since there are people who will buy and might make a mistake—or it doesn’t fit and [they] would like to return it.”

🕐 Time will tell: Zara “does have a unique customer base that is pretty loyal to its trendy styles and their limited product runs. They’ve established a great sense of urgency just on how fast they can turn goods,” noted Tyler Higgins, the retail practice lead and managing director at AArete. “But the other side is there are a lot of retailers that just won’t be able to do it immediately. You’re going to see this massive tail who just waits it out to see how customers respond. Ultimately, they either try to increase their customer acquisition by holding the $0 returns or just follow suit to manage what their margins are.”—JS

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