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Gloucestershire Business News

£7 billion cost of the great return

As the new year begins, so does the big return - not just to work, but to retail.

Every year, unwanted gifts and clothes that don't fit are returned to shops in their millions - and it is hitting retailers' bottom lines.

An investigation by The Times showed that one in three fashion items bought online are now returned - double the rate of clothing bought in store.

The returns figure is as high as 50 per cent for some womenswear, especially as there is a culture among young women to order clothes to just pose for photos for social media before returning them.

The returns are often free to consumers, but cost retailers an average of £20 per item. The process leads to a 30 per cent loss in profits, costing UK retailers £7 billion a year and inevitably pushing up prices for shoppers.

In warehouses across the country, parcels must be opened, checked for damage, then steamed, repackaged and sold again. If they are not back on the shelves quickly enough, seasonal items end up being heavily discounted, sold off abroad or, in the worst cases, even incinerated.

While returns are inevitable at any time of year, particularly after Christmas, retailers are working hard to cut the figures. Some are starting to charge for returns - as a deterrent to over-ordering and also to help alleviate the high cost of processing returns.

Many retailers now include a model's height and the size they are wearing in online images, so that customers can get some idea of how they would fit themselves. Retailers are also analysing data to spot any products which have a particularly high return rate.

Marks & Spencer is one of the companies which will contact customers who return a large number of items, while Asos says it will block persistent offenders completely.

Punchline said: "We all have unwanted gifts or clothes that don't fit from time to time, but persistent returns are hitting businesses hard and pushing up prices. They also have a big environmental impact due to packaging and transport. It's important that we all think more carefully about our shopping and do our bit to reverse this worrying trend."

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