E-commerce: the cost of "free" returns - Companies

E-commerce: the cost of “free” returns – Companies

The overwhelming majority of returns take obscure sidings […]mostly to a landfill or incinerator.

If in 1995, Jeff Bezos started selling books to launch his e-commerce business, it is not, as legend has it, because books were his passion or that of his wife and business partner. era. Not only either because a sector as atomized as that of publishing exposed it less to possible resistance or commercial reprisals. It is above all because the book was the ideal product to get started: easy to package, not fragile, without seasonality or expiry date as long as it is kept dry, not prone to technical breakdowns… And if the book is not liked, the e-buyer will blame the author more than the firm that delivered the book to him. Br…

If in 1995, Jeff Bezos started selling books to launch his e-commerce business, it is not, as legend has it, because books were his passion or that of his wife and business partner. era. Not only either because a sector as atomized as that of publishing exposed it less to possible resistance or commercial reprisals. It is above all because the book was the ideal product to get started: easy to package, not fragile, without seasonality or expiry date as long as it is kept dry, not prone to technical breakdowns… And if the book is not liked, the e-buyer will blame the author more than the firm that delivered the book to him. In short, the book is only very marginally exposed to the cardinal plague of e-commerce, namely returns. This is obviously not the case, for example, for clothes which are on the contrary highly subject to returns for a manufacturing defect, a size problem or simply a change of mind. E-commerce platforms are doing everything to make it easier to use. The online shoe seller Zappos, in the 2000s, was one of the first to generalize the practice of free returns without justification. To the point that it seems “natural” to us today: the amount of returns in the United States alone is estimated at 100 billion dollars. Although this reduces their profits, it remains very interesting, even vital, for them. Because it is obviously a strong commercial argument, an ultra-effective incentive that makes the purchase risk-free. If e-commerce firms decided to charge their buyers for returns, their bank accounts might be better off, but their business would suffer structurally: customers would let go less and would certainly let them go. For e-commerce businesses, the game is worth the effort. A customer advantage like any other? Not really. Because that’s where the shoe pinches: above all, don’t imagine returns as simple white operations. It is much more complex and perverse than that. If the operation of the outward journey (which is called logistics) turns out to be rather rational (despite its ecological absurdity), the return route (the “reverse logistics”) is on the other hand totally irrational. Because the products that are returned are only very exceptionally put back into the circuit to make another e-customer happy. It’s as complicated as getting the toothpaste into its tube. Who can decide if a returned shirt is suitable for resale as new? What’s more, these are tasks that cannot be automated. The overwhelming majority of returns take obscure backtracks: they branch off either towards the parallel industry of bulk resellers, or towards deboning to recover some of its components (this is the case with computers, in particular), either mostly to a landfill or an incinerator. In fact, these “free” returns have a hidden cost. Free, as we know, is a myth. First, because if the invoice for returns is paid by the platforms, they pass them on in one way or another to their prices or their margins. Then because it is the manufacturers who bear the loss of the destroyed articles and must therefore also pass it on to all of their customers through their pricing policy. And finally, because it goes without saying that all this logistics for nothing has an exorbitant ecological cost. In short, free returns, everyone pays the price.

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