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Many unhappy returns: Fashion’s refund problem

Customer returns have risen steeply after a lockdown lull, and retailers urgently need solutions
June 1, 2022

For those averse to stuffy changing rooms, news that we are trying on clothes at home will come as no surprise. It’s now common practice to order outfits online and parade around the living room, before sending any unwanted items back. What happens to rejected garments after we leave the post office is a major problem for retailers, however – and things are getting worse. 

Every day, thousands of returns are taken to ‘recycling centres’ – usually dealt with in-house – to be sifted through by people and machines. Some products will be in pristine condition. Others, however, will have to be repackaged, cleaned, or repaired. In order to be resold, garments must then be transported to other warehouses or physical stores. 

Paul Martin, UK head of retail at KPMG, said this labour-intensive process has a “massive” effect on company profit margins and remains the “Achilles' heel” of fashion retailers.

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