Strategies and practices to reduce the ecological impact of product returns: An environmental sustainability framework for multichannel retail

Abstract

Product returns in retail are inherently wasteful and have considerable negative environmental impacts. Besides the monetary costs, they lead to increased transportation, packaging and processing, and the returned items are often discarded. We present strategies and practices retailers can adopt to manage their product returns in a way that reduces environmental impacts. With eCommerce flourishing, product returns have increased significantly. Whilst highest for online sales, they are a challenge across all channels. The importance of developing sustainability management in operations and supply chains is evident from the growing body of literature, but there is a gap regarding the management of product returns in a more environmentally sustainable manner. To address this gap, we interviewed multichannel retailers, retail experts and return service providers operating in the UK and North America. The findings reveal that although retailers have started paying attention to the financial impact of returns, there is little awareness of the scale of environmental impacts. In addition, retailers lack a comprehensive approach to addressing the environmental impact of product returns. Based on our findings, we (1) unpack the barriers inhibiting retailers from developing environmental sustainability plans in returns management,(2) present a set of strategies for retailers to reduce the environmental impact of returns and (3) develop a framework for environmental sustainability in returns management. Our findings and proposed framework have implications for research and practice on addressing the environmental impact of product returns.

The Role of Packaging in Sustainable Omnichannel Returns—The Perspective of Young Consumers in Poland

“…Currently, retailers focus mainly on early-stage return prevention, digital return systems, and improving visibility and routing of the returned systems. The framework proposed by the authors for the environmental sustainability of product returns does not directly discuss packaging issues [21]. This article compares the energy consumption of e-commerce with conventional trade channels with regard to packaging, last mile, unsold products and returns.…”

“…Duplicate result [25] The search was followed using the phrase omnichannel instead of e-commerce without success, this indicates that while the area of returns in e-commerce is studied (108 articles), the distribution via different channels is analyzed to a much smaller extent. Nevertheless, it should be noted that few papers are considering dual-channel or multichannel strategy in the scope of the research [21,22,27,29]. In summary, the topic of return in e-commerce with regard to packaging or sustainability has been of some interest (7 articles), but the omnichannel approach is not fully undertaken.…”

What Factors Drive Product Returns in Omnichannel Retail?

“…It would also be interesting to investigate whether the problems and possible solutions from the business-to-customer market also apply in a business-to-business setting. Furthermore, sustainability is an increasing concern for many retail customers (Rausch et at., 2021;Frei et al, 2023), and research is needed to determine whether providing information on the un-sustainability of product returns will change consumer behaviours.…”

“…Product returns are very wasteful in terms of resources, emissions, and monetary value (£7 billion in the UK according to KPMG; Eccles, 2022), significantly affecting companies, leading to deserted high streets, lost employment, and damaging the environment (Optoro, 2020). Many returned products cannot be resold or not through the same channel/at the original price; extra transportation and packaging is often required, and additional products are manufactured to replace those discarded (Wood, 2021;Frei et al, 2023). The costs of returns can be significant, increasing the cost of products to consumers, risking the jobs of retail workers, and reducing retail profitability.…”