WE LOVE FREE RETURNS! (But what happens to them?)

The hottest sector in retail is shipping back stuff that doesn’t fit.

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Our Great National Shopping Orgy took a breather in December, even as holiday spending hit a record level. Apparently we did most of our buying in October, back when journalists like me were hyperventilating about supply chain bottlenecks.

America’s buying binge may have slowed, but our desire to return what we’ve bought is stronger than ever. The business of returns, or “reverse logistics,” is booming.

— Close to one in three of us is estimated to have sent back at least one item this holiday.

— Reuters reports holiday returns could total $112 billion.

— UPS says “returns season” ends January 22nd, and the company expects to handle a record 60 million packages, further clogging the supply chain like a backed-up toilet.

What happens to those returns? You’re not gonna like it.

But first...

We expect free and easy returns these days. Generous policies pioneered by retailers like Zappos and Nordstrom are now ubiquitous. Why? UPS says about 80% of us are likely to buy more from a retailer that has an easy return process.

An entire industry is growing around reverse logistics. A startup called Happy Returns allows people to return online purchases to in-store kiosks, an idea so promising that PayPal bought the company last spring.

Kohl’s has embraced competition from Amazon by allowing Amazon customers to bring returns into their stores. (Sometimes those customers hang around and buy something!)

Jim Connor is the CEO of Duke Realty, a warehouse company, and he tells me reverse logistics is “a big driver of business today.” It comes with a cost: Real estate company CBRE says a reverse logistics warehouse requires 20% more space and labor capacity on average than a so-called “forward logistics facility.”

Returns may be easier than ever, and generous policies may engender loyalty and more purchases, but for the retailer, it’s not very profitable.

CBRE says a company called Optoro, which sells returns technology to retailers, claims the cost of handling returns has increased to around $33 for a $50 sweater. That $33 includes transportation, processing, and “discount and liquidation losses.”

SUCKING UP INVENTORY

One reason returns have gone into overdrive is because shoppers (mostly women) have gotten used to buying multiple sizes in one order, knowing that the rejects can be returned for free.

And we are doing that. A lot. Like, all the time. I mean, one reason the shoes I want in a size 7.5 are not available at any given moment is because you bought them, along with a size 7 and 8, just to try them all. Whichever one fits, you’ll keep. The others go back.

How common is this? I spoke with women across the country about their online shopping habits; here are their experiences.

Aileen Markowsky — Mastic Beach, NY

Aileen is a community affairs liaison for a state senator. She started buying multiples sizes of items while dieting in 2014 ahead of a family wedding. “I was buying everything in two sizes because I needed to know what size was going to fit.”

Now she’s hooked on buying multiples because of easy returns. She recently bought Kansas City Chiefs sweatpants in two sizes and returned one to her local Kohl’s… in New York. Not KC. “Nobody’s buying Chiefs things in New York.”

Aileen’s order. Anyone wanna buy a pair of Chiefs sweatpants?

Cathy Sutherland — Leesburg, VA

Cathy is an attorney who likes to shop online. “Covid really kicked it into high gear.” She makes frequent use of free returns. “Apparently I’ve lost half an inch [in height] since my twenties,“ she says with a laugh. “My feet grew a size with kids, and now they’re apparently going back down.”

Once or twice a month she gathers up her Amazon returns in bulk, “and then I just take it to Kohl’s.” And if an item can’t be returned for free? “I wouldn’t even buy it.”

Hiking shoes Cathy ordered. Notice “Purchased other variations 2 times.”

Jeanie Hanes — Glendale Springs, NC

Jeanie is a mother of three grown girls who’s now “trying to take care of me for a change.” She’s been buying multiple sizes for decades, all the way back to L.L.Bean’s old-fashioned, snail mail catalog. Back then, she says, “I went and locked myself in a big closet upstairs on the phone, because we didn’t have internet.”

Now she orders online in multiple sizes, especially when it comes to jeans. “I’m tall, so if I get jeans, for instance, they’re always just a little bit too short,” she says. “It’s just easier to order several sizes and not have to go get out of the house and go try them on.”

Amy Disston — Temecula, CA

Amy is a chef who always buys dresses on Amazon in several sizes. “I really read the reviews.”

She doesn’t trust photos, because the dress is usually on a model who “looks good in a burlap sack.”

Carrie Garczynski — Evergreen, CO

Carrie has experience in retail, and she knows how difficult it is to predict size online. “It all depends on the brand and how they cut the actual fabric, and if it’s cut on a Monday or a Friday.”

She says retailers expect a certain amount of merchandise to be returned. Back when she was a buyer for a mail order company, “Our prices were inflated for items that were returned.”

Carrie’s order in two sizes.

Valorie Jones — Winslow, AR

Val runs a nonprofit horse ranch for military veterans, and she buys a lot of boots. Or she tries to. She wears a size 11 Narrow. “I’ve always had trouble finding shoes.”

She recently ordered 22 pairs of hiking shoes. She originally intended to keep two. She kept seven. When Val finds a pair that fits and looks good, “I want to get it in every color.” She’s also fallen in love with Zappos customer service. “You get a joke of the day when you call Zappos.”

Val’s recent Zappos orders. If she likes one, she’ll buy ‘em out.

Maria Ceballos — Jersey City, NJ

Maria is a widow and mother of four who sometimes keeps stuff that doesn’t fit rather than going through the process of returning it. Recently she purchased a dress online which wasn’t right. “We gave it to somebody for the holidays.”

She also admits to buying a couple of extra coffee mugs from one online store to meet the free shipping threshold and then returning them later. She’s hardly alone.

The dress doesn’t fit. Maria may give it away.

Rosey Ibarra — Glendale, CA

Rosey is a voracious shopper who’s also CEO of a salon suite business. “I just don’t have the time to get everything and do a power shop” in a store, she says. So ordering multiple sizes and then managing returns has become a way of life. “They already know me at Kohl’s,” she laughs. “[I] even had to hire an assistant so that they can run those errands for me.”

Susuannah Cuesta — Gualala, CA

Susannah is a semi-retired ballroom dancer who has moved to the redwoods of Northern California. “I have this weird body type that doesn’t fit traditional sizes,” she says. Shirts don’t fit right; pants are too short.

But she’s not like the rest of our shoppers. Amazon does not deliver to her house. (Oh, the humanity!) UPS does deliver, but if she wants to return something, she has to drive two hours to a post office in the nearest town. So she’s traded 2022 for 2002: It’s easier to make do with what you get. “I’ll just roll up the sleeves or only wear pants with boots [so] no one will tell they’re high-water.”

Tiny Jordan — Dallas, TX

Tiny is a plus-size model who believes returns should always be free. “You’re not in the store right there looking at it, shopping. Things can be deceiving on the camera,” she laughs. Tiny thinks prices already reflect the cost of a return. “I’ve already paid for it… nine times out of ten.”

WHAT HAPPENS TO THE STUFF YOU RETURN?

So… after you put all the merch that isn’t right or doesn’t fit into a box and ship it back to the vendor, what happens to it?

“I never thought about that,” says Amy Disston. (Jane: Neither have I.)

“I just assume they put it back in their stock and resell it,” says Jeanie Hanes. (Jane: Me, too.)

“Now you’re gonna make me feel bad,” Cathy Sutherland says, making me laugh.

Alyssa Hardy is a fellow Bulletin writer who’s reported on the fashion industry for years. She writes about apparel sustainability and labor issues at “This Stuff.”

“When something gets returned, it’s only a small percentage that actually ends up being resold,” she tells me. “Oftentimes it can either go into just a pile that then goes to a discount store like a T.J. Maxx or a Marshalls.” Or, she says, “It just goes into — honestly — burn pits… or it just goes to a landfill.”

Optoro, the company that sells returns technology to retailers, claims returns in 2020 created nearly six billion pounds of waste. I have no idea how they come up with that number — big numbers like that make me wary — but it seems clear that not everything we send back ends up being resold.

Sometimes, for the retailer, it’s just not worth the hassle.

“JUST KEEP IT”

Almost everyone I interviewed has been told to keep an item rather than return it, because the item didn’t merit the retailer’s cost of transportating, processing, and re-stocking.

Aileen Markowsky was told she could keep some shoes, which she then donated. For Jeanie Hanes, it was makeup. For chef Amy Disston, it was rubber gloves.

Cathy Sutherland purchased a “portable treadmill” on Amazon for the surprisingly low price of $50. It turned out to be a plastic stool (“I think we were having a little bit of a fraud problem,” she tells me). Amazon didn’t even bother requesting it back, but it did send a refund.

Some items are large and valuable. Valorie Jones says a donor gave her nonprofit an extra gazebo that a furniture retailer sent to him by accident. When he tried to return it, they told him to keep it.

There’s gotta be a better way, right?

SOLUTIONS

— Pay for a purpose. According to a UPS survey, more than a third of us would be willing to pay for returns if we knew the process was “more sustainable.” What “sustainable” means isn’t clear. But we sure do like that word, don’t we?

— Consolidate returns. Returning several items together would cut down on the environmental cost. It’s happening at Kohl’s and Stein Mart with Amazon returns. Cathy Sutherland says she asked a Kohl’s employee how often they put all the returns into “one ginormous box.” The woman told her that trucks arrive “once or twice a day” to take away mountains of returned merchandise.

— Buy less. At least 70% of our economy is based on consumer spending. If we stopped — heavens to Betsy — what would happen? Well, with inflation at 7% we may soon find out. Perhaps fast fashion won’t be so fast for a while.

Oh, who am I kidding?

Alyssa Hardy says there’s little incentive for retailers to make fewer products, and “people are buying just as much” as ever, despite the pious preachings of Gen Z to be sustainable and shop at vintage clothing stores.

Still, there is an interesting trend Alyssa is watching called “circular fashion” — you buy something and then sell it back to the brand when you’re done with the item, and then the brand breaks it down and remakes it. “Patagonia does it,” Alyssa says.

— Add more tech. Real estate company CBRE says the returns process needs “more sophistication.” Solutions might include videos and “virtual try-ons” of items to help customers make better size decisions during the initial purchase. More retailers might want to use augmented reality “that allows customers to try on or test items before they receive them.” Metaverse, people!

Technology could also speed up the process of returns so that items get back to the vendor before they’re out of season. That’s hard to do when you’re extending returns windows to 60, 90, even 120 days.

— Improve sizing guides. Most importantly, new tech could help us pick the right size. An article in Vox says a universal size guide ”is a false god,” but someone could create “apps that use a cellphone to measure the body.”

Alyssa Hardy agrees that retailers could do a better job with measurements, instead of encouraging customers to “just buy two.” For example, brands could offer affordable customization.

Even little things would help.

“I spoke to somebody at Kohl’s about [having] models in different sizes,” says Aileen Markowsky. “That would help greatly.”

Carrie Garczynski suggests that more sellers compare sizes across brands. She was on one retail site with a program that surprised her. After you put in your measurements for an article of clothing, “They have you choose another brand, and you tell them what size you wear in that brand, and then they give you a projected size that fits you.” That’s a program Rosey Ibarra would like to see. “I would love that kind of matrix.”

So would I.

In the meantime, I have to send back this jacket.

Meet our shoppers:

Correction: A previous version of this story said Stein Mart allows Amazon returns in its stores. It did, until Stein Mart closed all of its stores.

What solutions would you recommend? Men, I know you’re pretending you don’t do this, but come on. Leave a comment, and I promise to “return” the favor.