Destruction of returns at Zalando, Amazon and Otto

Author: Dimitri Lagun
Date: 29.06.2018

Number of returns continues to grow

Year after year, the Germans send a three-digit million number of their online shopping packages back to retailers such as Amazon, Otto, Zalando and Co. back. But what happens to the mass of returns? Especially Amazon stands in the firing line of critics. The online giant is accused of destroying the returns.

How many packages are affected exactly is not known. The number of returns is kept as secret just like the number of packages sent. According to the mail order trade association, the value of goods sent last year was 58 billion euros. It is estimated that this was about 2.8 billion couriers, express and parcel shipments.

The University of Bamberg has now founded a research group that deals with returns research. They estimated the number of returns to about 250 million in 2013. As the number of returns continues to increase, the experts assume that the number of returns has also increased.

Whereas the online fashion house Zalando is more transparent. The product range of the Berlin-based company consists of around 300,000 articles from 2000 different brands. In 2017, they send around 90 million shipments to customers in 15 different European countries. The majority of the returns include clothings and shoes: “The return rate is on average 50 percent across all markets” says a Zalando spokeswoman – in no other business is the return rate as high as in the fashion industry.

The majority of returns is undamaged and returns to sale. Goods with slight damage is sold at lower prices or donated. “Zalando only destroys goods in exceptional cases, for e.g. if this is necessary for health reasons – pest infestation, pollution or similar. This affects about 0.05 percent of all items” said the company.

The return is easy for the customer: for example, Zalando offers a 100-day return policy. But with each return, the cost for the business increase, which is why they try to limit the number of returns. One way to reduce the number of returns are article description that are as detailed as possible. According to a returns researcher from Bamberg, the number of returns was not really lower even at the time of the Quelle catalog.

But it is getting problematic for the online retailer when goods are returned used and cannot be resold. Although there are no figures, Amazon and Otto both claim to destroy returned goods only in exceptional cases. “All goods are carefully checked in so-called returns operations. The vast majority of goods can be put back on sale immediately” says Otto.

“A small portion of the goods must be worked up visually – for example, removing fingerprints on TV screens – and then also goes back to sale.” But a “very small percentage” could not be saved, according to a spokesman from Otto. Damaged goods from Amazon as well as from Otto are sold to recyclers, which sell these on their own account to their customers.

According to Amazon they use several programs, in order to keep the disposal rate of products as low as possible. Parts of these programs are product donations to charities, recycling, or the sale to buyers. “In our known market for consumer goods including textiles, food and tools, Amazon acts absolutely exemplary in our estimation” said Stefan Grimm, the CEO of the bargain platform to the online special medium Internet World Business.

But Amazon also offers smaller online retailers the chance to use Amazon as a storage and shipping service provider. On request to that, you only get general information to avoid waste.

In total, it is unclear how much returned or damaged goods really end up in the garbage every day. Zalando mentions a disposal rate of 0.05 percent. If you take this number as basis for the entire industry that would mean that with two digit billion retours every year across Europe millions of items would end up in trash.

But that’s nothing compared to the food industry. The environmental organization WWF estimates that around 18 million tons of food are disposed in Germany every year – and the number is rising.