H&M is the latest retailer to introduce a charge for online returns

Retail giant H&M has now followed in the footsteps of retailers including Zara and Boohoo by charging shoppers for online returns.

According to the retailer’s website, there is now a £1.99 return fee per return parcel to store or online for non-members “which will be deducted from your refund”, however, returns remain free for all H&M Members.

The fee will also not be charged if an item is determined to be faulty or incorrect, so customers are advised to make sure to note that information when registering a return.

Retail analyst Richard Hyman, Partner at the retail consultancy TPC (Thought Provoking Consulting), said: “It’s no surprise to see H&M starting to charge for returns. It is the reality that very few people are able to make an acceptable return on investment in online retailing, and returns are a major source of margin dilution. As it is, most retailers that do charge tend to go for a relatively nominal figure which often makes a contribution to fulfilment costs, but doesn’t really cover them.

“For some time, retailers have simply accepted returns and done very little to mitigate their cost. Increasingly, the clever use of tech is able to lower the cost of returns and make the most of the opportunity of a significant customer interaction. Returns are certainly a cost, but they can be turned into an opportunity to submit relationships with customers too.”

Jamie Cairns, Chief Strategy Officer at Fluent Commerce, a global software company that’s focused on inventory data management at scale, which works with the likes of JD Sports, Aldo, L’Oréal, Prada Group and LVMH, commented: “With product return rates in ecommerce ranging between 20% to 30% and global e-commerce sales projected to hit USD 4.9 trillion by the end of 2023, the volume of returns is only set to increase. As a result, the way retailers and brands manage returns is becoming a more important part of the customer journey.

“Following this latest announcement, I think we’ll see more online retailers charging for returns. Most retailers will be familiar with the challenges created by customers who both buy and return lots of products. Identifying these buy/return patterns is becoming an important step in effectively predicting the potential level of returns, which in turn, can help prevent excess stock replenishment.”

Last year, marketing platform ROI Hunter conducted research with over 2,000 UK consumers. The company found that almost half (47%) of respondents would be prepared to boycott an online retailer who chose to charge for online returns.

Inditex-owned Zara led the way in introducing a charge for online returns in May of last year. Zara too offers free returns to store.