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Zara charging £1.95 for online returns to drop-off points

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Fashion giant Zara is now charging online customers a fee for returns at drop-off points across the country.

The retailer charges buyers who want to return items to third-party drop-off locations a fee of £1.95, which is deducted from the refund amount.

However, returns for online orders at the group’s stores remain free, the group told This is Money.

Recent findings from returns specialist ReBound revealed that one in three fashion items purchased online are returned, around double the rate of items purchased in-store.

Zara shoppers have another 30 days from the date their order ships to return an item purchased online. Items “must have all tags on and be in perfect condition,” the retailer says on its website.

Such a move by a mega-brand like Zara has led to questions about whether charging online shoppers for returns could become the norm in the future, especially amid growing concerns about sustainability and the environment.

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Companies like Zara will also be all too aware of the potential impact exceptional online shopper feedback can have on their bottom line.

The retail landscape has changed dramatically over the past decade, and ordering dresses, bras, and even shoes online has become the norm.

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Still, it’s not an industry without pitfalls, and online order returns have skyrocketed and can be a headache for shoppers and retailers alike.

Whole swaths of online order returns can also, in some cases, affect a retailer’s finances.

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Findings from returns management firm NShift claimed it costs businesses an average of £20 to process each return online, taking into account everything from shipping and storage to repackaging and discounts.

Earlier this month, online fashion retailer Boohoo revealed that profits had been hit by online shoppers returning clothes at a faster rate than before the pandemic.

Boohoo’s pre-tax profit fell 94% to £7.8m in the year to the end of February.

However, its sales are still well above pre-Covid levels, after high streets closed and shoppers turned to online ordering.

But since the restrictions were lifted, customers have flocked to physical stores and Boohoo says its online shoppers are returning more items.

Some retailers like Asos said they would block “serial returners” from their online store, while Marks & Spencer also said it would contact customers returning an unusually high number of online orders.

Additionally, some companies already charge for shipping or collecting returns for online orders.

At Wayfair, for example, return shipping costs can vary between £4.99 and £9.99 for small parcel couriers and between £20 and £50 for large parcel couriers.

Take a hit: Boohoo's profits took a hit amid rising levels of online order returns

Take a hit: Boohoo’s profits took a hit amid rising levels of online order returns

Recent research from parcelLab, which looked at 200 of the UK’s top retailers, found that 76% of brands continued to offer free returns, despite some sustainability commitments.

The results also suggest that more than a quarter of Britons would choose one brand over another if they conveyed strong sustainability commitments, adding that nine out of 10 retailers do not encourage paperless returns.

Tobias Buxhoidt, managing director and co-founder of parcelLab, told This is Money: “It is important to strike a balance between providing convenience to the consumer while limiting the impact of the notoriously damaging returns process on the environment.

The proliferation of ‘serial returns’ has become a real problem for major retailers, so it’s no surprise that Zara is now introducing a £1.95 fee to return orders – and it’s likely other major retailers will follow in Zara’s footsteps.

“If retailers are to start charging for returns, then it becomes a paid service and needs to be fast, efficient and communicated directly to the consumer. Retailers’ attention to their environmental impact must be coupled with a first-class customer experience if fees are to be implemented more broadly by brands.

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