Return to sender: Costs for returning clothes

Return to sender: Costs for returning clothes

Returns are bad news for clothing companies.

This week ASOS warned that they would miss their profit forecasts after seeing a significant increase in the number of products returned by customers. At the same time, BooHoo said that sales fell during the three months to the end of May, partly due to rising return levels.

This comes after both Zara and Next announced that they would no longer offer customers free returns online. This means that customers who are dissatisfied with their purchases must either cover the cost of returning goods or find a physical store to take the unwanted item with them.

However, those like ASOS adhere to their free return policy – and describe it as a “core part of our offering”.

Why do customers send back more goods?

Retailers blame the cessation of most Covid restrictions and the return to more normal social and work habits.

BooHoo’s CEO John Lyttle said that during the height of the pandemic, customers were “less sensitive to passports” than before. They bought things for comfort rather than style and since they were not going anywhere, it did not matter if they were a little too big or small.

At the same time, ASOS ‘CEO Jose Antonio linked the higher return to rising consumer prices. He suggested that because people felt a pinch of inflation, they were more likely to give back what they did not want to get their money back.

So why do some retailers conclude free returns?

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The idea of ​​free returns goes back to a time when online shopping would have been new to the masses. People may have been reluctant to take the chance to buy something – especially clothes – that they had not been able to try on first.

By offering free returns, the retailer told customers that they could take a penny and – if it turned out to be the wrong size or something they did not like – they would not be without money.

But people do not really need to be attracted to shopping online these days – especially with so many people getting used to shopping online during the pandemic. As a result, there is no real need to encourage buyers to take the digital step.

But in the end, the decision to end free returns depends on money.

This is of course because there were never “free” returns – it was just that the store covered the cost of returning the item. And doing so is becoming an increasingly expensive business.

It is the postage itself, whose cost is constantly increasing.

There is also the cost that the retailer incurs to process the order in the first place, only to have to process it again when it returns.

And when they take the product back from a customer, there is a good chance that it will never be sold again – even if it is in perfect condition.

This is because large online clothing retailers often do not have the ability to control everything that is returned; and even if they did the “fast fashion” business model, that means the product may be out of date when fully processed.

The end result is not only a cost for the business, but also for the environment – because mountains of clothes stop being manufactured and sent around the world, to end up in the trash.

As a result, there is now the somewhat ironic situation where some retailers are trying to discourage returns altogether – after previously using them as a way to encourage sales.

Do they have the right to charge shipping costs for returns?

Yes, they have the right to ask the customer to bear the shipping cost when returning an item.

If you paid for shipping to receive the item in the first instance, the retailer is obliged to refund it together with the cost of the item – but not the shipping cost for the return itself.

What rights do consumers have when shopping online?

Within the EU, customers have the right to return an item purchased online – without having to state a reason – within 14 days of receiving the item. It does not matter when you placed the order, or when a retailer shipped it – the two-week period begins from the moment it lands at your door.

Once you have notified the store that you want to return the item, you have another 14 days to actually get it to them – so it is up to four weeks together to get it back to the retailer.

Of course, this presupposes that you return it in the condition you received it in – retailers can still refuse a return if they can show that the product has been damaged in some way.

The rules are different again, you are dealing with a wrong object. Essentially, these time limits go out the window, so you have a lot more time to send back. At the same time, the dealer is responsible for all costs incurred in the process – including shipping.

So customers should not be in the pocket when trying to solve a problem with a faulty product.

How about if it comes from the UK?

Here it can get a little messy.

In theory, all stores that sell to the EU are obliged to offer the same consumer protection required by retailers here.

And as it stands, the UK’s own consumer protection is still quite closely aligned with the EU’s.

But the official advice from the Competition and Consumer Protection Commission is to assume that your rights do not automatically apply when you shop outside the EU.

Essentially while you shall have the same protection as you have in the EU, the reality is that – if you encounter a problem and a dealer does not play ball – you will have a hard time getting help.

If you do not get anywhere with a dealer based here, you will eventually have the opportunity to take it to court for small claims. But it will not deal with a complaint concerning a dealer outside the EU.

At the same time, you will struggle to get the complaint taken seriously by the relevant authorities in the UK or any other country outside the EU. They are more interested in their own consumers.

A CCPC survey from last year showed that of Irish shoppers who had problems with orders from the UK after Brexit, less than half of them had their problems solved.

So the general advice is, where you can, to try to buy within the EU just to give yourself as much protection as you can if it does not work. This is especially important if you are making a large or important purchase.

What about customs duties?

Keeping your purchases within the EU is also a good way to avoid being affected – potentially twice – by customs.

For example, you can buy a product from a UK retailer that is not set up correctly after Brexit, which means that you will suffer a tax and customs bill from customs. Should you then discover that you need to change it, the replacement product may come with a second hit from Customs.

There is a form that you can fill out for duty relief for such things as repairs – but it’s not straightforward, it’s actually more for a business rather than a consumer.

And even if you just return the item to a UK retailer, you may still end up with the first customs bill.

This is because the customs duties come through the postal or courier company used, not the retailer. So even after you get your money back from the store, you still have to contact the courier and prove to them that the item has returned before you have any hope of getting your customs duty back as well.

But it’s not always easy to know if the place you are buying from is subject to Irish taxes …

No – and as many have learned to cost it over the last year or two, having a dot IE address or an Irish flag in the corner does not necessarily mean that the retailer is Irish, or even properly set up in Ireland.

Unfortunately, the only way to be sure is to take a closer look at the site itself and see where the company’s headquarters are.

The reality is that at this stage, most of the big players have got their houses in order and can handle Irish orders quite seamlessly.

Many of them, including some British companies, may now handle orders through a warehouse in like Germany – but as long as it is in the EU, you do not have to worry about any nasty shock from customs. You will also have the same rights and protections that you would have if the store in question were based in Galway.

But the important thing is to check before handing over your money – and if you can not find out where the company is registered, then it may be best to find an alternative source that is a little more transparent.

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