Best Buy sells its returns

New goods on the trash? This happens with returns in online retail

Online retail is booming - and with it, returns. Every year customers send back a three-digit million number of packages to Amazon and Co. What is happening to it?

Shopping is fun - but regrets often follow: German online shoppers send three-digit million parcels back to Amazon, Otto, Zalando and Co. every year. But how do the online giants deal with this flood of returns? Amazon in particular has come under fire. The accusation: massive destruction of new goods.

No exact numbers

There are no exact numbers. Large companies such as Amazon and Otto keep the number of parcels sent as much a secret as they do with the number of returns. According to figures from the mail order trade association bevh, German online retailers sent goods worth 58 billion euros to customers last year. The number of courier, express and parcel shipments has reached dizzying proportions: In 2015 the number was 2.8 billion, the management consultancy MRU estimated in a study for the Federal Network Agency.

And how many parcels do the customers send back? How much is destroyed? At the University of Bamberg there is a working group on returns research, which assumed 250 million returns for 2013; a more recent estimate is not yet available. Since online retail has grown significantly in the past five years, the experts assume that the number of returns has also increased. That's what Björn Asdecker, one of Bamberg's return researchers, says.

(Source: Statista.de)

Returns quota at 50 percent

The online fashion house Zalando practices transparency, which is unusual in the industry. The Berlin-based company has 300,000 items from 2,000 different brands in its range and in 2017 sent over 90 million shipments to 15 European countries. Clothing and shoes are sent back particularly frequently: "The return rate is an average of 50 percent across all markets," says a spokeswoman - the return rate in the fashion business is higher than for other products.

The majority comes back undamaged and is sold again. Slightly damaged goods are sold more cheaply, some are donated. "Zalando only destroys goods in exceptional cases, e.g. if this is necessary for health reasons - pest infestation, pollution or the like. This affects around 0.05 percent of all articles," said the company's answer.

Self-inflicted suffering

Online retailers make it easy for customers to regret: Zalando, for example, offers a 100-day right of return. But since every return causes costs, the companies try not to let the number of returns increase immeasurably. Because every return means costs. One way of avoiding returns is to describe the item as precisely as possible. According to the Bamberg returns researcher Asdecker, the rate of returns was presumably not significantly lower even at the time of the analog Quelle catalog.

Amazon and Otto do not give any figures, but both companies emphasize that returned goods are only destroyed in exceptional cases. "All goods are carefully checked in so-called return operations. The vast majority of goods can be put up for sale again immediately," says Otto. "A small part of the goods has to be optically processed - for example removing fingerprints on TV screens - and is then also put up for sale."

A "very small percentage" of the returns can no longer be restored to a new condition, explains an Otto spokesman. Both Otto and Amazon sell damaged goods of this kind to recycling companies, who then sell the goods on their own account.

"Amazon acts in an exemplary manner"

According to the company, Amazon has several programs to reduce the number of products being disposed of. These include discounted sales of returns, product donations to non-profit organizations, recycling or the sale to buyers. "In our opinion, Amazon is acting in an exemplary manner in the well-known market for consumer goods including textiles, food and tools," said Stefan Grimm, managing director of the bargain platform restposten.de, in an interview with Internet World Business, an online specialist medium for e-commerce.

Amazon not only sells for its own account, but also acts as a storage and shipping service provider for many smaller online retailers - one of these services is disposal. Amazon only answered questions about the relevant procedure with a general commitment to waste avoidance.

Millions of articles are destroyed - at least

In the absence of reliable data, it remains unclear how much damaged or returned goods are actually disposed of. If one takes the very low disposal rate of 0.05 percent of the articles given by Zalando as a basis for an estimate for the entire industry, this would mean that with a double-digit billion number of shipments across Europe, several million articles are disposed of every year - at least.

But online trading does not stand out in terms of volume, on the contrary. The environmental organization WWF estimated in 2017 that 18 million tons of food end up in the garbage every year in Germany alone.