Clothing retailers are struggling with significant costs from fraudulent worn fashion returns according to new research, with a disproportionate amount coming from consumers aged between 25-34 years old. Tackling this problem by leveraging returns data could save Britain’s clothing retail sector millions lost due to processing costs and spoiled stock.
Returns platform ReBOUND surveyed 2,000 UK online shoppers and 200 clothing retailers selling items online, finding that one in ten (13%) consumers across all age ranges admitted to ‘wardrobing’ – purchasing an item with the intention of wearing it and then expecting a full refund for their worn fashion returns. 25-34 year olds made up the largest proportion of this group, with one in five (21%) admitting to wearing clothing before sending them back compared to just 6% of shoppers aged over 45 years old.
The Cost To Retailers
Returns cost UK fashion retailers at least £6.6bn according to ReBOUND data. With 13% of consumers admitting to wardrobing, Britain’s clothing retail sector is losing millions every year in additional courier charges, processing return costs and through stock returned in conditions that make resale difficult. Furthermore, those retailers who do resell stock in poor condition risk damaging their brand reputation with shoppers that purchase stock in poor condition
Three in five (62%) retailers told ReBOUND that the cost of wardrobing is significant to their business – almost a quarter (23%) say the cost is very significant.
While some retailers have started following Amazon’s example in banning customers found to be repeatedly returning items, ReBOUND is urging retailers to view the returns process as an opportunity to leverage data and retain customers who spend more than they return in the long term.
Neglected Returns Strategy
Two in five (43%) retailers admit their returns strategy requires improvement, with more than one in ten (11%) businesses admitting their returns strategy is poor and in urgent need of improvement. Yet just 20% see investing in improving the returns experience as one of their top priorities, with three in five (60%) focusing instead on the browsing experience, while a similar number (58%) are investing in the delivery experience.
“It’s tempting for retailers to adopt a ‘one size fits all’ approach to returns, but banning shoppers for repeatedly returning items overlooks that individual customer’s lifetime value. An effective returns strategy requires a nuanced, data-driven approach, as this will highlight that even the majority of customers who ‘wardrobe’ still keep more than they return. By banning repeat returners, retailers risk alienating shoppers who spend far more than they claim in refunds.”
– Vicky Brock, Director of Data Innovation at ReBOUND