Germany makes destroying products more difficult
The Cabinet of Germany has launched a draft law that is aimed to improve waste avoidance and to increase recycling. For online retailers this means the destruction of products will be more difficult, so they need to find a better way to deal with returns.
On demand webinar: is your brand going missing online?
On demand webinar: Get key practical advice on how to identify and fix lost sales opportunities in ecommerce, and really optimize your brand’s selling potential among resellers. Watch the webinar here.
The updated Recycling Act covers different rules to ultimately have less waste and more recycling in Germany, but one of the measurements is aimed at manufacturers and dealers. The law will prohibit companies from destroying stock unless it’s unusable.
Duty of care
This so-called ‘duty of care’ places more responsibility on companies, such as online retailers. “With this, for the first time the federal government is creating a legal basis to put a stop to the destruction of returns and excess goods. We are the first in the European Union to do this”, Svenja Schulze, Federal Minister for the Environment, Nature Conservation and Nuclear Safety, commented.
We are the first in the European Union to do this.
Currently, many online retailers destroy their stock, for example, at the end of (fashion) seasons, so they can free up some expensive space in their warehouses. But with the new law, stock may only be destroyed if the items are really unusable. Manufacturers and dealers must clearly document how they handle unsold goods. An option could be to sell or donate these products for a lower price.
Zalando already complies with the duty of care
One of the online retailers that are ready for the new regulation, is Zalando. In a news story shared on its corporate website, the German fashion giant says its current processes won’t fall foul of the new rules. “Zalando already fully complies with the duty of care for the responsible handling of returns and unsold new goods”, says Jan Bartels, Senior Vice President Customer Fulfillment at Zalando. “The destruction of goods and returns not only lacks any commercial logic, but in particular contradicts our understanding of sustainable management.”
Destroying goods lack commercial logic and our understanding of sustainable management.
97% of returned items are sold again
Zalando has a returns rate of around 50 percent, but it claims that almost all of its articles (97 percent) are sold again via the Zalando Shop, Zalango Lounge or outlet stores, or will be donated. Just 0.05 percent of items is said to be destroyed due to necessity, Zalando explains.
After today’s cabinet decision, the parliamentary procedure is initiated. The draft is also notified to the European Commission.