UK small fashion businesses lost approximately £48m from refunds in 2022

Small clothing businesses have lost approximately £48 million in 2022 due to customer returned goods, according to data from card payment provider Paymentsense.

The report analysed transactions from over 54,000 Paymentsense card machines across the UK and combined it with data from the Local Data Company. Data collected also included information regarding returns by region, industries, and months.

Looking at the top 10 industries with the most returned goods between October 2021 to September 2022, apparel and clothing ranked seventh, with trade supplies ranking highest. According to the report, it’s estimated that each clothing and apparel business in the UK lost £2,220 a year due to customer refunds.

The report highlights that there has been a small decrease in refunds across apparel and clothing since 2021, equal to around 3%. However, Paymentsense attributes this as response to the cost-of-living crisis, with people having less money to spend on non-essential clothing items.

According to the ONS (the Office for National Statistics), as we move into 2023, retail spending appears to have increased. The soaring cost of living helped some shops, such as discount department stores.

Across the UK retail sector, sales volumes rose by 1.2%, a whole percentage point more than the 0.2% experts were expecting. Clothing sales increased by 3.1% year-on-year, comparing January 2023 and 2022 data.

An expert from Paymentsense commented: "It’s unsurprising that online clothing sales rose by 2% in January 2023 compared to the figures from December 2022 due to the January sales often being popular following the Christmas period.

"As the economical state of the UK remains unsteady, this number is likely to fluctuate but seeing YoY growth is hopeful for clothing and apparel retailers."