Boohoo is latest e-tailer to charge for returns

By

Nigel TAYLOR

Published
Jul 13, 2022

In a further sign of businesses trying to control spiralling costs, Boohoo has now begun charging shoppers for returns. The online fast-fashion giant has discontinued its free returns system and started charging customers £1.99 for every returned parcel.

Boohoo blamed it on the rising cost of shipping, adding that the move was made so the company can "continue to offer great prices and products and do this in a more sustainable way".

However, Boohoo said its Premier customers, who pay £12.99 a year for unlimited next-day delivery, are exempt from paying the new return fees.

On the website, Boohoo informed customers: "Please note a returns charge of £1.99 per parcel will be deducted from [the] refund amount. You will be charged per parcel you return. To save on returns cost, it’s best to return your items in one parcel”.

The policy also applies to the menswear subsidiary, BoohooMan. However, it is so far unclear whether the rest of the group's brands, including Debenhams, Pretty Little Thing, Nasty Gal, MissPap, Karen Millen, Coast, Burton, Dorothy Perkins, Warehouse and Wallis, will be impacted by the move.

The problem of over-ordering and the volume of online fashion returns is a growing issue for the industry.

In May, Boohoo said soaring returns were partly to blame for a slump in annual profits, backing up its March trading update, in which it said net sales growth in Q4 had been negatively impacted by higher year-on-year returns rates. 

Elsewhere, high street rivals Next, Uniqlo and Mango have also introduced charges for online returns. Meanwhile, Zara announced that it would start charging UK customers for online returns, as part of a broader sustainability commitment to drive more shoppers to return via its stores.

Analysts have also said other retailers were likely to follow suit in charging for returns.

Home delivery expert ParcelHero said it predicted the decision was inevitable back in the spring. It said: “As long ago as May, when Zara revealed it was introducing return shipping fees, Boohoo’s decision became inevitable. The company had previously complained about the level of 'exceptionally high returns and we predicted: 'Logically, it may become one of the next retailers to introduce a returns charge'.”

ParcelHero said returns are costing UK retailers around £60 billion a year and that “shoppers have had a good ride with free returns”.  It noted the practice of ‘wardrobing’ has almost become the norm for 10% of online shoppers, its recent research has found.

“Now that the Covid online sales bubble has, if not exactly burst, certainly deflated, free returns are again becoming too much for retailers to absorb. Ironically, just as online retailers are seeing profits fall, 'wardrobing' is booming again now that people have resumed socialising. As a result, it’s highly likely that remaining UK online fashion retailers will swiftly follow suit".

It added: “Boohoo has also been clever in differentiating its returns charges, announcing returns are free for its premier customers. That’s an intelligent way of incentivising customers to join up to its loyalty programme”.