H&M has joined a growing list of retail stores that have begun charging customers to return their online purchases by taking the cost out of their total refund. The retailer started testing charging for returned items in September of last year in the U.S. but has now branched out to the UK with other local stores including Zara and Uniqlo to cut down on costs.
Customers in the UK are now required to pay a £1.99 ($2.47) return fee for each returned parcel, which is still a significant difference from the $5.99 customers are required to pay H&M in the U.S. The change won’t apply to in-store returns or to H&M members and was first implemented to cut costs, with the company telling CNN last year that it would be testing out paid returns in several markets.
“It all depends on how it’s received by the customer. So that’s why we do a test to see if that is something to fast track,” Helena Helmersson, H&M’s CEO said during an earnings call with analysts, CNN reported at the time. “If we’re about to roll it out, it will take some time,” she said. “We don’t have an exact time limit on it. But again, let’s see when we see the evaluation of the tests, whether this is the most impactful thing to do or not.”
By charging for returns, H&M could cut back on the amount of carbon emissions it puts out, cutting back on the negative environmental impact created by mass returns which doubles down on the amount of pollution it puts out. Carbon dioxide emissions grew from 15 to 24 million metric tons in the U.S. from returned goods alone between 2019 and 2022, with up to half of the clothing purchased online being returned to the store, The Guardian reported.
“It’s interesting that companies seem to be doing it by stealth, but it’s a sensible thing to be doing,” retail expert Jonathan De Mello told the BBC. “It makes economic sense, as it discourages shoppers from bulk buying online products and then returning the majority of them. That’s been a real problem for companies.”
H&M’s UK website tells shoppers they “will not be charged the fee if an item is determined to be faulty or incorrect” and requests they notate that when they’re inputting their return information. H&M also appears to be enticing customers to become members, meaning they won’t be required to pay the £1.99 return fee.
“Particularly in the cost of living crisis, retailers need to work harder to retain customers, as people are keen to shop around for the best deals,” De Mello told the BBC. “Loyalty is fickle, but if you can provide clear incentives, such as free returns, then you’re more likely to retain your customers.”