Early last week, H&M told customers of a change in return policy – they were to start paying a £1.99 return fee for both in store and online parcels. However, within the week the fashion giant did a U-turn on this decision and said that the same fee will only apply to online returns.
Considering how tough trading has proven to be, retailers have had to think of ways to save money wherever they can; H&M was only the latest fashion retailer to come to the conclusion that paying for deliveries was a loss-maker, as Zara and Boohoo also made this decision in 2022.
This isn’t so much a problem specific to H&M or Asos, but rather an occupational hazard of selling clothing and shoes online. According to Whistl’s data on ecommerce returns, at least 30% of all orders are returned, compared with only 8.89% in brick-and-mortar stores. KPMG also reviewed data and estimated that by 2020, up to half of the clothing purchased online was being returned, which was costing businesses approximately £7bn every year.
According to Nick Drewe, a retail expert and founder of online discounts platform, Wethrift, it was unsurprising to see this business move from H&M after operational costs have increased significantly.
However, Drewe also pointed out that competitors such as Asos, which are still offering free returns, benefit from trading solely online, meaning that they don’t have to factor in the associated costs of running multiple stores across the country, as H&M does.
Drew also said: “Interestingly, customers can access free refunds from the retailer if they register to the H&M loyalty scheme. This decision has obviously been made to incentivise more sign-ups, which can then be used for further marketing and promotional activities in order to remain competitive during the cost of living crisis.
“It will certainly be interesting to see if this has a negative impact on customer spending and the perception of H&M, as due to the increasing cost of living, consumers are more conscious of spending than ever before,” he added. “Despite the cost of processing refunds being fairly small, for many, this could be a deal breaker when it comes to choosing to shop with H&M, or with competitors who offer a free and more convenient returns policy.”
Since implementing a new return fee, H&M received fresh backlash from consumers who said that “if sizing was more consistent, they would need to return less”. The retailer admitted that it needs to improve its consistency in clothes sizing, as CEO Helena Helmersson said, “there’s always improvement to make”.
While Helmersson also insisted that H&M had “lower returns than many others”, the company wants to take steps to ensure that “whatever customers buy, they want to keep”. This would be achieved by improving its size guides and standardising garments so that each size correlates to specific measurements to get rid of confusions.
Many consumers told the BBC that the difference between the same size garments “is ridiculous” and expressed frustrations about the change in policy, saying that “returns are not always the customer’s fault”. The problem isn’t isolated to just H&M, but consumers seem to agree that it has a “particularly” bad track record.
“Among big retailers H&M is particularly bad at sizing. Their M can be anything from XS to XXL,” one shopper told the BBC.
In the fashion retailer’s most recent financial report, it saw profits rocket to £353m from £67m off the back of its cost-cutting programme, a part of which included no longer paying for returns of stock. This attention to losses comes as a response to last year’s bad profits, but perhaps the company should look into improving access to changing rooms to encourage shoppers to try before they buy.
