ASOS will start charging UK shoppers who frequently return large quantities of goods a £3.95 fee to return items, unless they return up to £40 worth of an order.
The online fashion retailer, which previously offered free 14-day returns of unused items as part of its service in the UK, has informed some shoppers that it has updated its “fair use” policy for orders placed after October 8.
Frequent returners who are signed up to the group's Premier subscription service must keep at least £15 of their original order to avoid the fee, while non-subscriber shoppers who regularly return large quantities of items must keep at least £40 of their order.
The company doesn't define frequent returns, but one industry definition is that it refers to customers who return more than nine out of every 10 items they order over a long period of time.
“As part of a small group of customers who frequently experience a high rate of returns, you will only be eligible for free returns if you deduct more than £15 from your order value. If you deduct less than £15 from your order value, we will deduct £3.95 from your refund,” said a message sent to shoppers who are signed up to ASOS' subscription service.
Last November, ASOS highlighted combating high return rates as a big part of its efforts to cut costs over the coming year in order to boost profits.
The retailer, which sold a majority stake in its Topshop business this week to pay down debt as sales continue to fall, says 6% of shoppers frequently ordered discounted items last year and returned the majority of them, causing a £100m hit to profits.
Online retailers are starting to charge for returns in response to an increase in returned goods and the rising costs associated with disposing of unwanted items, including the environmental costs of disposing of goods that can't be resold. Retailers are preparing for the peak return season, which typically occurs around Black Friday discount day in late November.
Depending on the retailer, up to half of the clothing purchased on their website are being returned, with the number of returned items up 26% in 2022 compared to 2021, according to returns specialist company ReBound.
“The market is moving toward a paid returns model,” said Al Gerry of returns logistics company ZigZag, who said his company has “received multiple enquiries from other fashion retailers who want to implement paid returns. The industry is clearly taking notice of what ASOS is doing.”
H&M, Boohoo, New Look and Uniqlo currently charge for online returns, except if the item is returned in person to a store, and several other major companies are thought to be considering introducing some form of delivery fee this year.
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ASOS and Next are among the retailers that have already begun sending letters to problematic returners warning them that their accounts are being monitored.
Last year, ASOS customers who were found to be continuing to abuse the system were notified that their accounts might be deactivated, but this affected less than 0.5% of shoppers on the site.
Boohoo has also reportedly begun disabling the accounts of premier subscription customers if it determines they have “abnormally high returns activity.”
ASOS, which has used free returns as a marketing tool in the UK, has experimented with introducing fees in other regions, and charges a fee for returning items within 14 days in the US and some European countries, including Poland, Belgium and Portugal. Some countries, including Australia, charge a fee for all returns unless the item is faulty or in error.
An ASOS spokesperson said: “We are making this change to continue offering free returns to the majority of our customers on every order.”
