‘Return fee could avoid 16% of all returns’

Consumers in Germany will order products online with a total value of 70 billion euros this year. But every sixth parcel will be returned. In order to contain this process a bit, a legally required return fee could help, economic researchers say.

Ecommerce in Germany is expected to grow 11 percent this year, which means it will be probably be worth around 70 billion euros. These are fantastic numbers, but the downside is that one in six parcels is sent back to the online retailer.

490 million articles got returned last year

Economic researchers at the University of Bamberg published a study today, which shows that a required return fee could help with reducing the amount of garbage and declining the burden of climate change. The stud is a follow-up from research published last spring, which showed that German online consumers returned an estimated 490 million articles last year.

‘It’s worth thinking about such a measure’

“The surveyed participants see great future potential in a working online measurement tool and more uniform size specifications of manufacturers”, researcher Björn Asdecker says. “In addition, the study results suggest that even a low statutory return fee could be a tool to get the returns and their negative effects under control. It’s still too early for a holistic assessment of such a measure, but in our view, it’s worth thinking about it.”

Size tool and standardized sizes could avoid 25% of returns

Its’s especially fashion retailers who expect a lot from a functioning online size tool. “Data analysis, AI and existing everyday technologies such as a smartphone’s camera for body measurement will enable significant savings, as long as retailers and consumers use these technologies”, Asdecker says.

“In addition, the size of clothing is currently not very meaningful, which leads to increase returns. Manufacturers should use binding, standardized size specifications”, he says. Both measures would significantly reduce the returns of clothing, the research group estimates that 25 percent of returns could be saved, which is equal to about 120 million articles.

€2.95 return fee could avoid 16% of all returns

But another possible, and probably less popular measure could be to introduce a legally required return free. It’s estimated that a fee of 2.95 euros per shipment could avoid around 16 percent of all returns, which affects about 80 million items.

“The majority of small and medium-sized retailers would like such a return fee, but it’s hard due to strong competition. For strategic reasons, major online retailers deliberately will go for no fee, so they can build competitive advantage. That’s why, by legal obligations, the same rules should apply to all, Asdecker says.