Buy. Return. Repeat … What really happens when we send back unwanted clothes?

The rise and rise of online fashion stores – and their generous returns policies – has created a new industry dedicated to dealing with our unwanted clothes. But what damage is being done – to our planet and to retailers – by our boomerang shopping habits?

In the past, the post office has been an embarrassing place for Megan Hitt. The 25-year-old nurse from south Wales recalls a time, a few years ago, when she had to approach the counter with six different Asos parcels in her arms, her "shopping addiction exposed for everyone to see". Since university, Hitt has been a prolific online shopper – buying several outfits at a time, picking one to keep and returning the rest. This time, when she handed over her parcels to be scanned, she was ashamed that there were so many. Still, she knew she would be back soon – she already had another Asos order on the way.

Buying and returning clothes online is part of the fabric of modern life. For years, Hitt didn't think much about it: "I used to buy and return like it didn't matter." At her worst, she’d order three parcels a week; sometimes, if she knew she’d wear something only once, on a night out, she’d keep the tags on and send it back. "It was something we all used to do," Hitt says of her university days. "In a house of six girls, four did it all the time."

In the UK, customers return £7bn of internet purchases every year, while more than a fifth of all clothes bought online are sent back. Across the globe, return rates are typically higher when customers shop online – in the US, 8-10% of sales from physical shops are returned, while 20-30% of e-commerce purchases ultimately rebound. Rising returns during the cost of living crisis are troubling retailers; in the spring of 2022, fast fashion retailer Boohoo blamed an increase in returns for a 94% slump in pre-tax profits.

The returns problem is now so widespread that there is a specialist organisation dedicated to studying it: the Product Returns Research Group (PRRG) at the University of Southampton. Regina Frei, a professor of operations and supply chain management who leads the group, has found that it costs companies £11 to deal with the return of an £89 item, in a situation when 20% of orders come back. Frei has also spoken to warehouse workers and discovered that many businesses don't know the real reasons products are sent back – 70% of returns are logged as a "change of mind" by the customer, partly because this is the first thing that workers can click on their drop-down menus.

"A lot of retailers are not aware of the full scale of the returns problem," Frei says. "There is often a lack of strategy in how to deal with returns." Lisa Jack, a professor of accounting and a member of the PRRG, says the situation is escalating to the point where "it could wipe out any profits companies make selling goods".

Yet the returns phenomenon does not just affect retailers – it has had a knock-on effect across the economy, and in some ways has created its own shadow economy. There are cleaners who revive the returned clothes, delivery drivers, warehouse workers, seamstresses, packaging manufacturers and waste management companies whose jobs arguably exist because we just can't stop sending stuff back. Entire new businesses have sprung up or expanded to deal with – and feed off – our returns obsession.

It's partly why Hitt is now a lot less embarrassed when she sends unwanted parcels back. "Now they’ve got the InPost lockers where you don't even have to see anybody," she says. "You can just take the parcel and scan the QR code." In November 2022, InPost reported record year-on-year growth, proudly noting that 46% of residents in London, Birmingham and Manchester were "within a seven-minute walk" of an InPost locker.

The shadow economy also partly explains how Hitt's shopping habit became so intense. She admits that, as a student, "I always needed to have something different on in every Instagram photo, I never would have worn something again." But she also points the finger at delayed-payment app Klarna. In 2019, Asos began collaborating with the Swedish fintech company, which allows customers to pay for their products 30 days after they "buy" them.

"If we had something on the weekend, we’d Klarna four different outfits, see which we liked the most and send them all back," Hitt says. "You wouldn't even be waiting on the return money because you never paid for it in the first place." The official Klarna website boasts: "Paying after delivery allows you to try before you buy."

InPost and Klarna are just two businesses that benefit from customers such as Hitt. Yet traditional retailers are left vulnerable by rising returns. "It affects the company's bottom line, so it can lead to a lot of losses," Frei says. "It can contribute to retailers having to shut down branches, high streets getting more deserted."

Our penchant for returning stuff both creates jobs and jeopardises them; benefits businesses and threatens them. For individual retailers, the costs can be astronomical, but for the planet, the costs are even higher. When you pull out a sticky label and slap it on the front of your parcel, your return is technically free – but what is the price we really pay? What is the true cost of the return economy?

Here is what many of us assume happens when we order a dress, frown, sigh, put it back in two layers of plastic packaging and send it back. The dress arrives at a warehouse. It is rebagged in an unripped plastic packet. It is put back on a shelf. Somewhere, a hopeful person who entered their email address in a "notify me when back in stock" box gets a life-changing ping, and the dress lives happily ever after in its new home.

This, Frei says, is very often not what happens. "If it's not in perfect condition, if there is a delay in the shipping or in the processing, or if you keep it for quite a long time before returning it, then it's not going to be resold," Frei says. Third-party returns platform Optoro estimates that only 50% of returns will be.

Frei says most consumers are not aware of the environmental impact of returns. One logistics firm put the carbon dioxide cost of returns in the US as being equivalent to the output of 3m cars. Even if the dress you sent back isn't thrown away, selling it on is also costly for the environment. There's the transport, of course, and often clothes are "wrapped in paper and a plastic bag that need to be replaced, and if it's something that's easily crinkled, it needs to be steamed".

According to anti-waste charity the Ellen MacArthur Foundation, one truckload of clothing is sent to a landfill or burned every second. The Atacama desert in Chile has become a dumping ground for 39,000 tonnes of unsold clothes a year from around the world – piled high and stretched as far as the eye can see, these textiles leak pollutants into local water and sometimes catch fire in the heat. Even before we consider the environmental impact of sending these unwanted clothes across the globe, fashion production is responsible for between 2% and 8% of global carbon emissions.

While many companies have mastered "forward logistics" – designing, making, packing and shipping their product as efficiently as possible – "reverse logistics" are messier. This leads to further waste, as stock is updated based on what is sold, meaning companies manufacture more of a product that's ultimately sent back.

Without efficient reverse logistics models, businesses often sell stock on to "jobbers" who bulk-buy returns in pallets without knowing what's inside or what state the goods are in. "Even then, a large percentage of it will probably go to waste," Frei says, "and there is even more transport and packaging."

One solution is for retailers to develop circular business models, getting the maximum use out of their products by repairing or recycling them. Andrew Rough is the chief executive of Advanced Clothing Solutions (ACS), a 25-year-old clothing rental company based in Scotland that expanded its services in 2019 to repair and resell returned clothes for high street brands.

In recent years, Rough says things have been "growing really quickly" as brands wake up to the importance of circular solutions. Yet not everyone is on board. "We’ve tried to speak to fast-fashion houses, but a lot of them didn't really want to engage with us, sadly," he says. It's easy to see why – cheap clothes have a reputation for falling apart in the wash. Rough says ACS has helped a number of companies become both more sustainable and more profitable, but there is still a way to go. "We’ve got to change the mindset that clothing is stock. It is assets. And those assets will have many users over their lifetime."

ACS is housed in a huge site near Motherwell that processes over 6m clothing items a year and in peak (read: wedding) season employs 250 people. When I visit in March I can see why some employees – known as "garment longevity specialists" – compare the sprawling facility to the factory in Monsters, Inc. In the movie, bedroom doors travel up and down mechanised rails; here, dry cleaning bags flit past overhead, each tagged to track the shirt or dress inside. Walk up to the second floor of the warehouse and you have to dodge out of the way of the steady stream of bags as the pleasant smell of steam wafts over from the dry cleaning area.

Before it is eventually rehired or resold, a returned piece of clothing makes numerous stops in the ACS facility. After being unwrapped, assessed and blasted in an ozone sanitisation station that looks not unlike the inside of a truck, a damaged item will make its way to dry cleaning supervisor Angela Grant, a veteran with 28 years’ experience. At her "spot cleaning station", Grant works to remove every stain you could possibly imagine – a laminated guide tells her the exact amount of solution to put on everything from felt tip pen to vomit. Coloured bottles hold the different solutions: you need a splash from the red bottle and the green bottle to get out a mustard stain, while you’d need to pour from the red, green, blue and yellow bottles to remove jam.

"If you get a dress, at the top there will be fake tan and makeup stains," Grant says. "Down the middle it will be food stains and at the bottom – if it's a long dress – it will be trailed in the dirt. That's how I always assess it." Grant often finds chewing gum in pockets, and inside the lining are the kind of stains you don't want to ask about. Red wine is the hardest thing to get out.

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Then there are washing machines, dryers and trouser presses the size of single beds, but it is at the repairs station where seamstresses work tirelessly to make old clothes look new. There is a special, sturdy sewing machine to repair rips in denim and an entire wall of buttons, boxed up by brand in clear plastic containers or in the occasional Celebrations and Quality Street tub.

"I repair all of it – dresses, trousers, jeans, jackets, waterproof clothes, everything that you wish," says Alicja Białaszczyk, a 41-year-old repair specialist who has worked at ACS for a year after leaving her job as a care community worker. Before she came to the UK 14 years ago, Białaszczyk studied clothes design in Poland. "It's very artistic," she says of her ACS work: if she has four of the same dress to repair but the right buttons, zips or sequins aren't available, she uses one dress to repair the other three. "When you finish something, you feel happy," she says. "I feel like it's worth it when we think about the environment." The job has even changed Białaszczyk's own habits: "I’ve stopped shopping now!"

Once the job is done, the clothing is either sent back to the retailer to resell, or ACS photograph it and list it on eBay on the brand's behalf. In the far corner of the warehouse is a government-accredited centre where employees can get qualifications in textile care and fashion logistics; there are conference desks and chairs, a line of computers and information stuck on the walls just as in any other classroom. Euan Mcgeehan is a 26-year-old former cinema worker who has completed an apprenticeship and gained a Scottish vocational qualification since he joined ACS 18 months ago. Mcgeehan currently takes photos of clothes for resale, but has been trained to work in various departments.

"Before, I had no idea how much stuff goes to waste and how much you can salvage," he says. Mcgeehan deals with a huge variety of clothing for resale – a Dolce & Gabbana hairpiece baffles him when we speak, but he reasons: "Someone wanted to buy it before and someone will buy it again." He feels as if he has a career ahead of him. "You’re doing something to help the planet, which is more important now than ever."

Who is to blame for rising returns? It's easy – and for many people, probably satisfying – to point the finger at gaggles of girls in their university halls, buying silver sequin cross-halterneck bodycon dresses for £14 before sending them back for free. While admitting there are some "wardrobers" who abuse the system like this (in 2019, Asos began deactivating the accounts of "serial returners" on its site), Frei also blames organised criminals.

"I do 1-2 Amazon refunds a week, each order worth around 400 EUR," reads one ebook guide to returns fraud. Across the internet, there is a network of "refunders" who fraudulently complain about items to secure refunds, then ship empty boxes back; they write advice guides for others wanting to do the same. Some refunders, Frei says, even charge a fee to carry out the fraud on your behalf. According to bot protection company Netacea, there are now 1,600 refunding companies selling their services.

"Every company has goodwill – this can be taken advantage of for refunding," the ebook reads. Frei says this is precisely why the issue is so hard to tackle – and adds that many businesses are not aware of the true scale of returns fraud. Still, the problem goes far deeper than wardrobers and refunders – in reality, we all return stuff, and it's this ubiquity that causes problems.

Asos first introduced free delivery and free returns for all UK customers in 2009, after almost a decade of selling clothes online. When Zara launched its website in 2011, it was only natural to imitate and the company also offered free returns. In the subsequent decade, numerous brands followed suit. Before long, it was something customers took for granted. "It's just part and parcel of what you have to do, it's almost to be expected at this point," says Ruqsar Bibi, a 26-year-old master's student from Stoke-on-Trent who shops almost exclusively online. When we speak, she has two parcels with two different sizes of a top and a dress waiting for her to try on. She's not embarrassed that she will have to return them, but does feel "judged" by some post office staff. "They make little passing comments like, ‘Oh, someone's been shopping’ or, ‘Oh, this is why I do all my shopping in-store.’"

Yet the returns problem can't just be pinned on customers. Anyone who has shopped online knows that what you see is not always what you get. "Companies need to look at how they’re selling in the first place," Lisa Jack says. "Are people buying two or three different sizes because they’re not sure of your sizing? Are they buying different colours because the pictures aren't clear?" Bibi orders multiple sizes because "if I buy only one size, it's a risk, because it might not fit".

Claire (not her real name) is a 26-year-old delivery driver from Cumbria. Her job requires her to both deliver items and pick up returns, and she has even given some customers her number so they can text her directly when they want to send something back. She has found that it is customers in their 40s and older who tend to return a lot of packages, particularly around wedding season, and theorises that younger customers instead use resale apps such as Depop or Vinted.

"One of my customers has had a few weddings this last year and I’ve been taking absolutely loads of parcels to her. By the end of the week I’m getting loads back," Claire says. "Another of my customers was trying to find suitable workwear because she's got a new job, and everything she's getting doesn't fit right or it's not professional enough."

Sometimes, customers apologise, saying things like, "I’m so sorry you’re back again, I must stop doing this!" But Claire doesn't mind. Like ACS seamstresses, she benefits from the return economy. She used to work in retail, for a well-known high street brand, and has experienced first-hand how the pandemic altered appetites for online shopping. She now gets paid per parcel and has gone from delivering 70 parcels a day to around 120, plus extra money for heavier deliveries . She is making more as a delivery driver than she did in her previous job. "People order a lot, but then they send back a lot as well," she says.

While Claire does worry about the number of shops shutting in her local town, online shopping has changed her life. "I took on this job because my mental health started going downhill in my old one," Claire says. "I’m my own boss … I love that my round is rural, I get to see all the wildlife, I meet loads of new people. It's great."

How do you solve a problem like returners? That's something the Product Returns Research Group is trying to figure out. Frei's findings suggest that if you warn customers their return affects the environment, their behaviour changes. Retailers can make sizing guides and product imagery more accurate, and warehouse workers need to be given the time and expertise to assess returned products properly – Frei says workers are forced to rush because of strict targets and valuable information isn't logged. Then there are bigger changes that can be made by all of us: Frei believes society needs to move away from the concept of ownership and embrace models that reduce the environmental production cost of clothes, such as renting.

That, naturally, won't happen overnight. A more immediate change companies could make is ending free returns. Since last May, Zara – who declined to comment for this article – has charged customers £1.95 to return online orders. Asos, meanwhile, says 97% of its products are resold on the site after inspection and, if needed, repair and cleaning. It also says any clothes sold on to third parties have requirements on what can be done with them and it doesn't send products to landfill or destroy them unless legally required to.

Hitt says she orders less from Zara now and over the past year has tried to cut back on shopping and returning. "I wasn't really aware how bad it was for the environment, fast fashion in general," she says. But when a friend of a friend got a job at a big online fashion retailer, she broke the news to Hitt that many returns end up in landfill. "I am getting better at rewearing clothes," Hitt says, although she still orders new outfits two or three times a month. "Which I know still sounds like a lot, but is much better than where I used to be."