Stitch-up or sew right? In defence of ASOS’ £3.95 return fee

Fashion marketplace ASOS has announced it will begin charging some customers £3.95 to send back items, as part of a new returns policy.

The policy is similar to one enacted by fellow click-fashion brand, PrettyLittleThing (PLT) in June, who said it would deactivate accounts with “unusual high returns activity”.

Being able to place a mass order and then return unwanted items for free had been a key attraction for those buying clothes online. Affected shoppers have hit out at the charge. But ASOS has stood firm, arguing that “nothing’s changed” for most customers.

Getting rid of one its biggest USPs is a controversial decision for today’s fashion websites. Below, we explain why they’ve done it, and why it could make or break the struggling brand.

What is ASOS’ new return policy?

For many ASOS customers, the new £3.95 return charge will not apply. Thousands of ASOS shoppers received a notification over the weekend informing them that changes would be made to ASOS’ return policy, but it would not affect their account.

Some (around 0.5%) were told they had a “frequently high return rate”. These buyers will have £3.95 deducted from their refund if they keep under £40 worth of items (unless they are signed up to ASOS Premier, where they’ll need to keep at least £15 of their order).

The fee is higher than at PLT, which introduced a £1.99 return charge earlier this summer. However, PLT actually deactivated customer accounts it felt had violated their return policy.

Why are returns on the rise?

In consumers’ defence, the fit and look of clothes is hard to judge when purchased online. This is why online shoppers who have not seen an item pre-purchase have a legal right to return it and be offered a full refund if requested. But they are not entitled to a free return.

The practice of not charging for returns stems from the early days of internet shopping, when many buyers were still hesitant to spend money on something they hadn’t seen in-store. Fashion brands began offering free returns to gain trust, and it has ballooned from there.

Free returns have birthed a generation of serial refunders. A survey by ZigZag found that shoppers are most likely to return fast fashion items. Nearly half did so in the last six months.

Why are returns bad for business?

You’ll likely have seen videos of teenagers showing off their ‘ASOS hauls’, and holding up piles of the latest microtrends in their bedrooms. Known as bracketing, many of these consumers will buy the bundles to try on, only to return the clothes after they’ve been worn.

Bracketing is hugely expensive for businesses. Nearly one in five online orders will now end up being sent back, representing thousands of lost sales and a huge financial toll on SMEs.

The indirect consequences can also be costly. Sellers can waste hours working on returns. Without knowing how many items will be returned, they might struggle to know what to restock. Sometimes, the returned goods might be faulty or unsellable.

Brands are fighting back. Research from Which? has found that 12 out of the 20 biggest online fashion retailers do not offer free returns, including Boohoo, Shein, and now, ASOS.

Fashion conscious, or eco-conscious?

Another reason ASOS and PLT are clamping down on refunds is sustainability. Fast fashion is responsible for 10% of global emissions, and its track record is affecting brand reputation.

Part of the problem is that clothes are being discarded too quickly, as their low cost means customers see items as disposable. Analysis shows that, globally, a stack of clothing the height of Mt Everest is sent to landfill every seven minutes.

ASOS, for its part, says it doesn’t send products to landfill or destroy them unless legally required to. But dealing with returns is a headache for businesses. Firms can’t legally resell products in poor condition, yet they also don’t have the technology to sniff every armpit and check every collar for make-up stains. Often, it’s easier to simply chuck the item.

Shoppers are more eco-conscious than ever, particularly the young crowd that make up PLT and ASOS’ core audience. When a brand becomes associated with this ‘throwaway’ culture, high return rates become not just a financial concern, but a PR one.

Think before you click

Customers have expressed anger at the new £3.95 charge from ASOS, saying it is unfair. They are missing the point. Fashion has become associated with a culture of wastefulness, and the industry must lower its return rate if it is to clean up its act.

High return rates are also unsustainable for cash flow, particularly for SMEs. ASOS has been struggling with a sales slump that has slashed its profits. That it is targeting one of its biggest USPs, free returns, shows how much of a financial impact the practice can have.

The company must accept some responsibility. Inconsistent sizing and thin descriptions on some sites can make it difficult for customers to accurately judge their order. The problem is so prevalent that the AI-based fitting solution, TrueFit, today has 80 million users worldwide.

Still, the charge is a deterrent, not an outright ban. If ASOS can get its wardrobe in order, the next task is for customers to rethink their approach to returns. If we are to find an ethical, eco-conscious way to sell and buy clothes online, consumers must think before they click.