“Try now, never pay” – laundering is a form of “refund fraud” – warns expert

An expert warns that ‘wardrobing’ could put you in legal conflict with retailers.

Following the recent news that ASOS will begin charging customers for returns as part of its updated fair use policy, research from fulfilmentcrowd – a global provider of technology-enabled fulfillment services for fast-growing omnichannel brands – examined shoppers’ changing expectations when it comes to Returns process in eCommerce.

What consumers expect in the returns process:

Free returns; Ease of return; Instant refunds; Clear returns policy; Environmental concerns

What consumers don’t like about the returns process:

Complexity and inconvenience; Costs related to returns; Slow refund; Rigid return windows

Chelsea Banister, director of customer operations at fulfillmentcrowd, said on ASOS’ decision: “ASOS’s change to its returns policy highlights the shift in e-commerce behavior in recent years. As the market is busy with fast fashion and influencer-led promotion, behaviors such as massive online shopping have resulted in a drastic increase in volumes and subsequent returns. These returns incur costs for returning to the center, quality inspection and returning to the warehouse for resale (if returned in good condition), all of which must be accounted for. Add to this the differences in sizes between brands and the number of returns will be higher than ever. As an industry, we are all under pressure to increase sustainability and reduce our carbon footprint. I think that changing the returns policy will help limit mass purchases and reduce the overall number of returns. ASOS takes reasonable steps to remain a profitable company. With fulfillmentcrowd, we have also seen an increase in returns, which has led to a need for additional resources both in centers and from a customer service perspective.”

Austin Waddecar, CPO (Chief Product Officer) at fulfillmentcrowd, commented: “Many retailers struggle with mass customer returns due to operational costs, inventory management, environmental impact and fraud prevention. The most common reasons why a retailer may deny a customer a return are failure to follow the returns policy (e.g. not used with tags and original packaging) and missing the return deadline. However, retailers may also refuse returns for more unexpected reasons, such as high return frequency, non-conformance to original condition, return of free gifts or promotional items, or suspicious return patterns.

A broader industry analysis found that many retailers are struggling to cope with mass customer returns due to the abuse of returns policies. Lee Thompson, CEO of fulfillmentcrowd, added: “The number of products returned by consumers is increasing at the same time as customer expectations and desire to reduce their carbon footprint are increasing. One reason for the higher number of returned shipments is “bad” shipments: those that were lost, arrived too late or even arrived damaged. Resolving misdelivery issues typically involves frustrating and long communication cycles, and 85% of online shoppers say a bad delivery would prevent them from ordering again.”

Insights from the fulfillmentcrowd platform revealed key trends in customer returns and delivery disputes. Analyzing data from April 1 to August 29, 2024, the most common problem was “Where is my order” (WISMO) queries, which accounted for 76% of cases. This was followed by returns because items were no longer needed (22%) and damaged items or packages (2%). Focusing on industry divisions, most disputes during this period concerned household products. Household items were most often “no longer needed”, health and beauty products were most often damaged, and fashion items were most often missing. Looking at the monthly breakdowns in the analyzed period, July saw the highest number of reported disputes overall.

Thompson continued to comment on how the rise of BNPL and the showing off of large “hauls” on social media has sparked this trend, and how the subsequent rise in profits is creating new challenges for e-commerce companies: “One of the unintended consequences of the BNPL trend is a phenomenon that some retailers have called the “Try Now, Pay Never” phenomenon. Shoppers, especially in the fast fashion and clothing sectors, are increasingly turning to BNPL services to ‘try before they buy’. They order multiple items with the intention of keeping just one or two and returning the rest before the due date. Some shoppers also abuse returns policies, “gardderobing” (wearing items before returning them) or “bracketing” (buying many items in different sizes, colors or styles and then returning the ones they don’t want) – this behavior has led to a significant increase in rates returns, increasing the burden on logistics systems and impacting profitability.”