The returns problem

Fashion's returns problem has outgrown its solutions.

Four in ten fashion items shipped in Europe come back. Most take a wasteful round-trip to the warehouse before being resold, or end up in landfill. The financial, environmental, and regulatory costs are compounding faster than the industry's ability to adapt.

€890B

of merchandise returned globally in 2024: 17% of all retail sales

Source: National Retail Federation, 2024 Happy Returns report

The scale

The numbers that define the problem.

E-commerce returns are no longer a side effect of online shopping. They are a structural feature of the industry, and one that has grown faster than retailers' ability to process it.

30–40%

of online purchases in Europe are returned

Meteor Space, 2025

50%+

return rate on fashion dresses in Germany and the UK

Statista, 2025

56%

of all e-commerce returns are clothing

Gitnux

24.5%

online apparel return rate, three times the in-store rate of 8.7%

NRF, 2024

The fashion category leads every other e-commerce sector for return volume. The UK alone generated €7 billion in fashion return costs in 2022, and volumes have risen since.

Full return-rate data by category and country (NRF report)

The cost

Every return consumes most of its own value.

For every €40 of product value entering a return, a retailer typically sees only a fraction return to inventory ready for resale. The rest is consumed by reverse logistics, warehouse handling, repackaging, depreciation, and the share of items that cannot be resold at all. Processing costs alone can reach 20–65% of an item's original value. The industry has normalised this loss, but the economics are less forgiving every year.

Conventional return

Per a €40 return

€40 lost per return

Return logistics€8

Warehouse handling€10

Repackaging€6

Item depreciation€8

Written-off value€8

Illustrative breakdown based on industry cost benchmarks. Actual costs vary by category, volume, and geography.

20–65%

cost to process a single return, as a share of item value

Opensend, Shopify

18%

of returned items are financially written off entirely

Industry benchmark, Ben-Gurion University research

€103B

lost to return fraud in 2024 alone

Appriss Retail and Deloitte, NRF

Return fraud, including wardrobing, bracketing with no intent to keep, and empty-box returns, accounts for roughly 15% of all returns. Fashion retailers increasingly experience this as a structural cost, not an edge case. Combined with rising labour costs in reverse logistics and tighter margins across the sector, the 'free returns' model that drove e-commerce adoption through the 2010s is becoming financially untenable.

Figures from National Retail Federation, Shopify, Appriss Retail, industry research. See full source list below.

The operational reality

What the headline numbers hide.

The €40-per-return figure captures inspection, logistics, and write-off. It does not capture the daily operational friction that makes running a returns-heavy business hard, or the hidden costs that compound the headline number every week.

The refund no one has received yet

A consumer ships a return on Monday. It takes three to ten days to reach the warehouse. Inspection and refund processing adds five to fourteen business days. Banking settlement adds another three to five. By the time the money reaches the consumer's account, two to four weeks have passed. Every day in that window, the consumer is more likely to email, call, or open a support ticket asking where their refund is.

'Where's my refund?' is the single most common returns-related customer service contact. For a mid-sized fashion retailer, this alone generates hundreds of hours of support work per month.

January volumes the warehouse wasn't built for

Post-holiday January is the biggest return month of the year, with peak volumes running eight to ten times normal. Most warehouses aren't staffed or sized for this load. Retailers bring in temporary workers, pay overtime, rent additional handling capacity, and extend processing times. The fixed cost of that seasonal elasticity is paid year-round, not just in the weeks the peak actually hits.

During peak seasons, usual order volumes increase eight to tenfold (CEVA Logistics, 2024). Every retailer pays for that capacity, whether it is used that month or not.

Returns that arrive after the sale is over

A dress bought at 30% off returns two weeks later. By then, the sale has ended and the new collection is on the shelves. The item cannot be resold at the original price: it was never sold at that price. The sale price is no longer being offered either. The item gets marked down further, stored until the next season, or written off entirely. For fashion retailers, seasonal timing compounds the already-high cost of every return.

Items resold within weeks of return retain 80–90% of their value. After 60+ days, recovery drops sharply. Fashion's seasonality makes this a structural problem, not an occasional one.

The border crossed twice, paid for by the retailer

A consumer in Germany returns an item to a Dutch retailer's central warehouse. The warehouse inspects it, repackages it, and ships it next to a new buyer, who might well be back in Germany. The item crosses the border twice, each leg with its own carrier cost, customs handling time, and CO₂. For pan-European retailers, every cross-border return is effectively two international shipments the retailer pays for.

Cross-border shipping costs typically run two to three times domestic rates. Multiply that by the roughly 30–40% of online purchases returned, and cross-border exposure is a structural cost line for every retailer operating in multiple EU markets.

None of these costs appear on the invoice. They appear in customer service queues, temporary labour invoices, markdown spreadsheets, and cross-border carrier contracts. Retailers carry them quietly because the alternative, restructuring how returns work, has always seemed harder than absorbing the cost. That calculation is changing.

The environmental cost

Returns are quietly becoming one of fashion's largest environmental liabilities.

Returns generate their own layer of emissions, waste, and destruction that the industry has only recently begun to measure honestly, and the numbers are substantial.

24M

tonnes of CO₂ per year

Attributed annually to e-commerce returns globally.

Source: Optoro, 2022

750,000

tonnes CO₂ from UK fashion returns alone

From discarded apparel in one country, one year.

Source: ScienceDirect, 2024

+30%

additional emissions from the return

On top of the original delivery footprint. Every returned parcel is effectively shipped twice.

Source: CleanHub

4.3M

tonnes of returns sent to landfill

In the US alone, in 2021. The number has fluctuated but remains structurally high.

Source: Statista, Optoro

The emissions are not inherent to returns themselves: they are inherent to the model that sends every return back to a warehouse before sending it on again. A Dutch consumer returning a jacket in Amsterdam sends it to a warehouse that may ship it next to a buyer in Rotterdam, 70 kilometres away. The second shipment often uses the same fuel as the first.

Independent research has quantified it: up to 44% of warehouse returns in fashion e-commerce are structurally unnecessary.

Read the research

The regulatory reckoning

What the EU is doing about it, starting now.

Through 2026 and 2027, a series of EU regulations will directly affect how European retailers handle returns and the environmental claims they make about them. Some are already in force. Others take effect within twelve months. The era of 'voluntary sustainability' in e-commerce is closing.

In force

Corporate Sustainability Reporting Directive

CSRD · In force, amended 2025

Requires large companies to publish standardised sustainability reports including Scope 1–3 emissions. Returns and reverse logistics count as Scope 3: retailers must measure and report them under ESRS standards.

Enforcement Sept 2026

Empowering Consumers Directive

ECD (UCPD amendment) · Transposition March 2026, enforcement September 2026

Bans vague or unsubstantiated environmental claims. Prohibits 'carbon neutral' claims based on offsets. Fashion retailers making sustainability claims about returns will need ISO-standard verification.

In force Aug 2026

Packaging and Packaging Waste Regulation

PPWR · In force August 2026

EU-wide requirements to reduce packaging environmental impact. Imposes a 50% empty-space cap by 2030 and mandates design-for-recyclability. Every return shipment generates additional packaging: PPWR makes this visible and accountable.

Phased from 2026

Ecodesign for Sustainable Products Regulation

ESPR (textile destruction ban) · Phased from 2026

Prohibits large companies from destroying unsold or returned textiles in many cases. The 18% write-off rate becomes a regulatory problem, not just a cost.

Implementation 2025–2026

Extended Producer Responsibility

EPR (textile extensions) · National implementation 2025–2026

Shifts the cost of post-consumer textile waste from taxpayers to producers. Retailers carry more of the cost of items they cannot resell.

Three directives converge in 2026 alone. Forwarding's technology stack, with ISO-standard CO₂ reporting per transaction, no offset claims, and minimal packaging overhead, was designed with this regulatory environment in mind.

How Forwarding addresses each regulation

Regulations summarised from EU Commission, Carbonfact, and GFAW policy analyses. Dates accurate as of April 2026.

The market context

A €312 billion problem the industry hasn't solved.

European reverse logistics, the market for handling, processing, and disposing of returns, is projected to reach €312 billion by 2030. That figure represents about 38% of the global reverse logistics market, making Europe the single largest geography for the returns problem and its solutions. Most of that spend goes to handling returns the conventional way: ship them back, inspect them, repackage them, mark them down, write off what can't be resold. The technology, regulatory framework, and consumer behaviour are now all aligned for a structural alternative.

€312B

European reverse logistics market by 2030

Source: nShift, 2025 analysis

Why now

Three forces are converging.

Consumer behaviour is locked in

Vinted has 100+ million European users. Peer-to-peer transfer of consumer goods is no longer novel: it is embedded. Return rates are not going back to 2010 levels, and retailers who wait for them to are planning around a fantasy.

Margins are tightening

Free returns subsidised e-commerce growth through the 2010s, funded by venture capital and cheap logistics. Both have dried up. A majority of large retailers have started charging for returns, shortening return windows, or introducing restocking fees: signals that the old economics no longer hold.

Regulation is moving

CSRD is in force. PPWR takes effect in August 2026. Empowering Consumers enforcement begins in September 2026. ESPR textile destruction rules start phasing in through 2026 and 2027. Retailers still treating returns as a back-office problem are under-preparing for a two-year compliance window that is effectively already running.

A structural problem, a closing economic window, and a tightening regulatory environment. Waiting is not a neutral position.

The answer

There is a way to stop the warehouse round-trip entirely.

Forwarding routes returns directly from the customer who is returning to the next customer who is buying the same product. No warehouse receiving, no inspection, no repackaging, no depreciation. The consumer gets their refund as soon as the next buyer confirms receipt, typically within five to seven days, not two to four weeks. Seasonal peaks don't hit the warehouse because Forwarded items never reach it. Sale-period returns either match a new buyer directly or fall back to the normal warehouse flow. Cross-border returns match within the destination country whenever possible, eliminating one of the two international legs.

The matching algorithm has been independently validated and has been live in production at Kuyichi since February 2025. Every Forward saves €5 to €12 per return, 310g of CO₂, and removes one warehouse touch from the retailer's operations.

See how Forwarding works Read the research Run the numbers on your return volume

Sources

Return volume and rates: National Retail Federation (2024 Happy Returns report), Statista, Shopify, Opensend, Channelwill, Meteor Space, E-Commerce Nation.
Financial impact: Appriss Retail / Deloitte (fraud data), NRF (cost figures), Opensend (processing cost ranges), Ben-Gurion University (write-off research).
Environmental impact: Optoro (2022 CO₂ data), ScienceDirect (UK fashion return emissions, December 2024), CleanHub, European Environment Agency, Center for Sustainable Systems (University of Michigan 2025 factsheet).
Academic research: Eruguz, A. S., van Heijst, C., van den Heuvel, W. et al. (2024). Peer-to-peer return forwarding in e-commerce. Omega, 128, 103049. https://doi.org/10.1016/j.omega.2024.103127
EU regulations: European Commission, Carbonfact policy analysis, GFAW (2026 sustainability regulations overview), Textile Exchange, EU Commission Q&A guidance on the Greenwashing Directive (December 2025).

Last updated: April 2026

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