The retail sector has a unique opportunity to tackle the growing environmental challenge of product returns, says Inge Bujakiewicz-Baars, Head of Sustainability at ReBound.
Growing volumes of returns create concerns about the carbon footprint of sending items back, especially when items travel long distances, use multiple carriers and – potentially – inefficient logistics routes.
Another challenge is wastage, with a market average of 22%-44% of returned products never reaching another customer, and one in four items discarded completely.
Although the influx of returns shows no sign of slowing, retailers can transform returns into a more sustainable process to minimise waste, reduce emissions, and extend product lifecycle. This requires thoughtful strategies and collaboration throughout supply chains.
Cultivating a low-emission network
A more sustainable returns journey starts with rethinking transport and logistics.
Significant progress has been made here in recent years, particularly through multi-modality in transport and the use of alternative fuels. ReBound has increased the use of electric, first-mile services (the carrier that initially delivers the returned item to a local hub), uses rail transport where possible, and made the switch from diesel fuel to Hydrotreated Vegetable Oil (HVO) – a renewable, clean-burning alternative. This has reduced the CO2 of returns by a total of 115,724 tonnes and cut emissions per parcel by 28% in the last five years.
Understanding multiple factors is crucial to a more eco-conscious returns supply chain. Our Network Sustainability Index (NSI) was created to track and evaluate the sustainability credentials of our partner carriers, measuring key factors including fleet efficiency, warehouse practices, sustainability strategies, and social policies. It highlights carriers that excel in sustainable practices and helps retailers to choose partners that align with their own sustainability goals. This added visibility has led to a 6% improvement in the network’s overall sustainability score from 2023 to 2024.
Retailers can also think beyond the transportation of returns. For example, packaging is another effective way of reducing environmental impact. Reusable packaging can minimise CO2 emissions by 0.77Kg per container and prolongs the life cycle of the packaging to improve circularity.
It’s also important to provide customers with more eco-friendly carrier options for returns, empowering them to choose a sustainable method.
Circularity in the network
While logistics improvements tend to focus mainly on emissions, circularity focuses on prolonging the life of a product. Although a high number of returned items – around one in four – are wasted unnecessarily, improving the process of what happens to them when they arrive back at a warehouse can reduce this significantly. We handle more than one million items per month, and with advanced processes, 95% of these are returned to the retailer or brand for reuse or resale.
Most returns can be resold or rented without any further work, but product life can also be significantly extended through repair works or donations. Where there is no other solution, items can be sent for proper recycling.
Tracking returns data helps us to understand and improve the carbon footprint of returns. Recent PhD research supported by ReBound found that an item can be returned, refurbished, and resold up to 14 times before the emissions reach the same level of producing a brand-new item. This shows how important it is to keep products in use for as long as possible.
Collaboration is key
Creating a low-emissions and circular returns network isn’t without challenges. Industry trends pose limitations. Even though there is a strong desire to move to more environmentally friendly carriers, the availability of alternative fuel options from these carriers limits how far that goal can be achieved. This makes collaboration crucial throughout the entire supply chain.
The same is true for a circularity-focused network. It requires extensive collaboration with partners who have expertise in required services, from repairs and refurbishment to donation and recycling. Every aspect of the process must be carefully organised to be robust enough to form a sustainable, circular ecosystem.
As return rates continue to rise, the retail supply chain has more chance than ever to reduce their environmental impact. The key to more sustainable returns is collaboration, data-driven decision making, and improved processes. The benefits are clear for all.
