MASSIMU DUTI SOFTWARE

Returns have always been more difficult and expensive to process than outbound orders, according to James Hyde, co-founder of James & James Fulfillment. In June, Asos warned that higher return rates would sharply reduce profits in the current yearsending its shares to their lowest level in more than a decade.īoohoo’s finance director, Neil Catto, recently said group sales in the first quarter to the end of May rose 9 percent before returns - but fell 8 percent after returns were included. The challenge of such costs on producers of low-priced clothing is clear. “Every time someone calls or emails to ask ‘where’s my refund’, that interaction costs around £1,” said Gerrie. It also factors in hidden costs such as customer service contacts. That includes the cost of checking - including the infamous “sniff test” for detecting whether it has been worn - cleaning, repacking and tagging the garment. Gerrie said processing costs can range from just under £10 per item to around £20. He pointed to research suggesting that three-quarters of consumers check a retailer’s returns policy before making a purchase, but added that since Zara started charging he had had “a lot of retailers coming to us asking how they can change their return policies”.Īnita Balchandani, a senior partner at McKinsey, said returns were becoming “a real pain point” for online retailers.įree returns have been extremely popular with online shoppers but have come at a high price to sellers.

MASSIMU DUTI SOFTWARE

“It’s a brave move to try and change policy,” said Al Gerrie, founder and chief executive of ZigZag, a UK software company that helps process returns for dozens of retailers including Boohoo. The change follows an earlier move by Spanish apparel group Inditex to levy a £1.95 fee on returned items from its brands, which include Zara, Pull & Bear and Massimo Dutti. Shoppers will now have to pay £1.99 to return goods bought from Boohoo and BoohooMan, although other group brands such as PrettyLittleThing and Nasty Gal are so far unaffected.

Fast fashion retailers are competing on a new battlefield: returns.īoohoo last week joined Zara in charging for returns for the first time, as the industry moves to reduce the profit hit from customers sending back unwanted items.

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