The growth of online trading marketplaces continues to grow. It is currently in double digits and there is no end in sight to the boom. Nevertheless, the number of returns is increasing. Economic researchers estimate that up to 300 million parcels with 500 million items were returned by customers in German online retail in 2019 alone. The rate is 13 percent. The return rate is particularly high in special product groups such as clothing. The new high shows a consistency with the previous year. There are many reasons for the negative side effects.
A high level of comfort leads to a large number of Returns
Searching for a parking space in the city center and long lines at the checkout soon gave way to the new experience online, conveniently with a click of the mouse to go shopping. Short delivery times and a stress-free purchase process made internet trading attractive for customers within a short time. It didn’t take long either, and online retailing made it increasingly difficult for brick-and-mortar retailers to survive. The profiteers of the rapidly growing online trade were, among others, the parcel services such as Fedex, Deutsche Post and UPS.
The booming online trade, however, has a serious downside. What is meant is the return flood of packages with products in multiple designs and different sizes. Added to this is the partial destruction by the return providers of 4 percent annually. Online retailers complain about the large number of returns. You see the reasons in a careless buying behavior of the customers, without them having to contribute to the costs of the disadvantages. And yet most providers refuse to charge their customers for the additional service. They prefer to dispose of them instead of blocking their shelves with returns. The goods are also declared as a donation for the so-called “free value transfer” and are subject to VAT for the online provider.
Introduction of returns fees
Shopping on the Internet is so popular because it is possible around the clock and regardless of the opening hours, and – unlike in brick-and-mortar stores – the customer is granted a 14-day right of withdrawal. For environmentalists, this right is the main criticism of the topic. According to the scientists, the growing mountains of garbage and the increasing climate pollution caused by CO2 can only be effectively combated by increased care and return fees. So far, however, only 15 percent of online retailers – mostly smaller shops – have raised returns fees. Large and well-known shops are opposed to such charges. The same rejection is experienced by a legally prescribed minimum fee considered by the Federal Government while the returned goods are offered again at the same time. Precious metal shops are an exception. Companies that work sustainably and in an environmentally friendly way use recycling processes.
In the amendment to the Closed Substance Cycle Management Act (KrWG) proposed by the federal government, platform operators and manufacturers are to keep their products ready for use and at the same time make their disposal more transparent. The Ultima Ratio only allows destruction if a sale or a donation is no longer justifiable in all aspects – including the one that poses a risk to health. Scientists and the Federal Office for the Environment call the flood of returns an unsustainable condition. Online providers, on the other hand, see strategic advantages in competition in free returns.
Born 1981 in Strasbourg, is a freelance journalist for various online media throughout Europe, focusing on finance, real estate and politics. He gathered his professional expertise as a consultant for global players and medium-sized companies. Fournier studied economics and german in Paris and Dresden. He currently lives in Saarland and has been a member of the Euro Leaders team since the beginning of 2019.