More companies axe free returns due to cost and environment

Since then, businesses have found that free returns are financially unsustainable. In June 2023, high-profile online fashion retailer ASOS ended its years-long free returns policy in Australia. In the UK last week, ASOS started banning customers who repeatedly return large portions of their orders.

But McClelland, whose videos on TikTok have gained popularity for promoting more sustainable consumption habits, said businesses could do more to mitigate the problem.

“I do think there needs to be a deterrent for those customers who are ‘repeat purchase and return’ customers … However, I do think as well that there should be some investment on the retail side into making sure that the product they’re selling is a product that customers actually want to keep,” she said.

More retailers could, for example, photograph clothes on models in a range of sizes.

“So consumers could then see, ‘OK, this is what it looks like on someone my size’, and then they can make a more informed decision about whether the product will look good on them.”

Loading

Other Australian brands try to incentivise shoppers to cover the costs of returns: Byron Bay-based sustainable clothing store Afends provides free returns when customers choose store credit instead of a refund. Others offer free returns for online purchases if the goods are dropped off at a physical store.

However, competition from Australian fashion retail giants The Iconic, David Jones and Myer, which offer free returns on all purchases, puts significant pressure on other retailers.

Australia Post e-commerce reports indicate that, overall, 65 per cent of shoppers value ‘friction-free’ returns, with this figure rising to 72 per cent for Gen Z and Millennial customers.

Ben Wapling, the head of marketing for sporting goods retailer Intersport, said the company was constantly trying to strike the right balance between costs and customer experience: “We want to reduce as many barriers as possible.”

He said the costs of returning products ranged between $7 and $11 an order.

“You’ve got to weigh that up, but you also weigh up the potential of the customer saying ‘oh look, it’s all a bit too hard, I’m not going to make a purchase’,” he said.

While Intersport manages to integrate all their stock back into inventories to be sold again, unless items have been damaged, some companies that offer free returns send brand-new goods to landfills because it’s cheaper.

A report published by charity Good360 last month found that 30 per cent of clothing bought online and returned in 2024 was sent to landfills instead of being resold.

Melbourne-based small business owner Imara Seneviratne said her passion for sustainability as a consumer bled into her business practices.

Seneviratne runs Adamo, which sells sustainably sourced tote bags. Adamo does require customers to cover the cost of returns if they’ve changed their mind, but not if the item is damaged.

“As both a consumer and a business owner, I’m just trying to find a balance, like making the experience fair and flexible but also encouraging people to buy less and choose better,” she said.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.