Rewritten Article:
Here's the Scoop:
- H&M is expanding its policy of charging for online returns to a global scale, according to an email statement from the fast-fashion retailer.
- Since June, H&M has been charging U.K. customers without its loyalty program a flat fee of £1.99 (approximately $2.50) for online returns, as confirmed by the spokesperson. For U.S. customers, the fee amounts to $5.99, unless they're part of H&M's loyalty program.
- The company started charging online return fees in various markets, including Europe and the U.S., some time ago, according to the spokesperson.
Behind the Scenes:
Online orders from H&M will now be subject to increased return fees.
In the retail world, big names like Amazon and others have been hitting customers with return fees and stricter return policies of late. H&M, like its competitors, appears to be focusing on online orders.
The question remains as to why. It's unclear whether H&M's online returns are more costly than in-store returns or if the fee is aimed at boosting its loyalty program. The H&M spokesperson refused to elaborate on the company's reasons for instituting and expanding online return fees.
Returns have become a growing pain point in e-commerce. Consumers often order multiple items to try on, before making a decision, much like in a physical store.
"We work hard to ensure customers find the right size and fit from the get-go, in an effort to lower our return rate," the H&M spokesperson said.
Last year, the National Retail Federation found that return rates remain constant at 16.5%, equating to over $816 billion worth of returned goods. This translates to an average cost of $165 million in returns for every $1 billion in sales.
Moreover, for every $100 in returned merchandise, there's about $10.40 in return fraud, according to the NRF, which acquired the Reverse Logistics Association, a global trade association for the returns and reverse industry.
Retailers are moving heaven and earth to wrangle the skyrocketing cost of returns as consumers shop online in droves, stretching supply chains, especially during pandemic situations.
Yet, it's a delicate balance, as many customers view stricter return policies as unfair or inconvenient, according to a recent survey by Blue Yonder. Nearly 60% of the surveyed shoppers stated that such policies deterred them from making a purchase.
- As H&M expands its policy of charging for online returns globally, other retailers, like Amazon, follow suit with their own stricter return policies.
- The increase in e-commerce during the pandemic has led retailers to grapple with a growing issue: skyrocketing costs due to returns.
- The average cost of returns for every $1 billion in sales is $165 million, according to last year's findings by the National Retail Federation.
- In the fashion industry, there's approximately $10.40 in return fraud for every $100 in returned merchandise, as confirmed by the NRF.
- H&M's policy change might be an attempt to combat the financial impact of returns, with the company stating its effort to lower the return rate by ensuring customers find the correct size and fit from the start.
- AI and AI-led algorithms could potentially play a role in reducing return rates, as they can predict customer preferences and sizes more accurately.
- The retail market may need to implement innovative solutions, such as AI, to strike a balance between managing return costs and maintaining customer satisfaction during the pandemic and in the future.
