Environmental Impact of E-Commerce Returns
In December, more than 1 million packages will be returned to online retailers daily by American consumers. This surge of unwanted items will peak on January 2, a day UPS humorously refers to as “National Returns Day.”
For shipping companies like UPS, this post-holiday rush brings plenty of business. However, for everyone else, the sheer volume of returns creates a significant issue. A recent estimate suggests that these returns generate around 5 billion pounds of waste sent to landfills in the U.S. alone, and an additional 15 million tons of carbon emissions.
While many are reconsidering their choices in the face of climate change, the environmental impact of e-commerce returns remains an often-overlooked crisis.
The concept of a “money-back guarantee” has long been central to retail. Many iconic brands built their reputations by upholding it, and it benefits retailers as well by boosting sales. For example, outdoor-goods company L.L. Bean thrived for over a century offering a lifetime return policy. Similarly, studies show that generous return policies in e-commerce lead to increased purchases, despite also driving up return rates. Zappos.com, for instance, once noted that its best customers were the ones who returned the most items.
Returns have been increasing steadily. In 2018, 10% of American purchases were sent back, totaling $369 billion, up from 8% just two years earlier. Younger consumers, in particular, treat online shopping as a trial process, often buying multiple items to try at home, returning those that don’t fit or appeal to them. Globally, some countries like Sweden see return rates as high as 60% for certain products.
The logistical demands of processing these returns have given rise to an entire industry, but the environmental cost is staggering. In 2017, Optoro Inc., a company specializing in return management, reported that only 10% of returned merchandise actually makes it back to shelves. The rest may be sold to discounters, sent to recyclers or charities, or, more often, end up in landfills and incinerators.
Moreover, the journey of returned goods from the customer back to retailers is carbon-intensive. E-commerce returns, which occur at a much higher rate than in physical stores, contribute significantly to emissions. In the U.S. alone, 165 billion packages were shipped last year, consuming the equivalent of 1 billion trees in cardboard.
Even as companies like Amazon work to make their packaging more sustainable, returns continue to increase their resource consumption.
Finding solutions won’t be simple. The most obvious one — eliminating free returns — would likely face considerable resistance. However, a few alternative strategies could make a difference. Retailers could add carbon-emission labels to return packages or stop including pre-printed return labels, cutting down on paper waste. Offering “returnless refunds” for items that can’t be resold, such as undergarments or cosmetics, could also help.
As technologies like augmented reality and touch-based innovations improve, online clothing retailers could create virtual dressing rooms to reduce return rates.
While returns are a natural part of e-commerce, they come with significant environmental costs. By rethinking how we handle these returns — whether through improved policies, new technologies, or more responsible consumer choices — there’s potential to reduce their impact on our planet.
One solution is to repurpose returned items rather than sending them to landfills. Many of these products are still in excellent condition and can find new homes through resale. Wholesale platforms dedicated to processing and redistributing these returns help keep valuable goods in circulation, reducing waste and promoting a more sustainable approach to retail.
Returned goods can often find new purpose through companies like Retry Supply, which focuses on reducing waste and extending the life of these items. This approach promotes sustainability by giving products a second chance, contributing to a more eco-friendly shopping cycle. Together, small steps like these play a role in fostering a more sustainable future.
