In 2018, almost eight million returns ended up in the garbage in Germany and this happened even though German online merchants could have donated or recycled them. Dr. Björn Asdecker, head of the returns management research group at the University of Bamberg, sees the cause above all in false incentives for retailers.

Four percent of the goods returned in the German online and mail order trade are disposed of, which corresponds to approximately 20 million articles per year. This includes clothing, but also electrical and leisure articles, furniture and household goods as well as products for daily use. In a recent survey, Dr. Björn Asdecker, head of the Returns Management research group at Bamberg University, wanted to get to the bottom of the background of high returns disposal: “This study provides the first detailed insight into the background of returns disposal,” explains Asdecker. “This is important in order to draw the right conclusions at the political level”.

Obvious waste of resources

The result was determined by economists from the University of Bamberg on the basis of a survey of 139 German online and multi-channel retailers. The survey brought light into the darkness: “Disposal is often without alternative. For example, just over half of the items disposed of cannot be reprocessed because they are defective, for example”. Another cause of particular concern is sustainability: dealers have to destroy around one million products because brand and patent owners tell them so. “As these articles are usually in very good condition, this is an obvious waste of resources,” says Asdecker.

Why aren’t the returns donated?

In almost 40 percent of cases, it would be possible for retailers to donate the goods if a buyer could be found. So why aren’t the 7.5 million items donated every year? This is primarily due to tax reasons that the sales tax to be paid would exceed the disposal costs. In addition, small traders in particular know that it would be too costly to select a suitable donation organisation. “Obviously, dealers need more information about who accepts donations in kind in small quantities,” interprets Asdecker.

Providing incentives for retailers

Dealers are therefore more likely to choose to dispose of the returns, as the costs are very low, averaging 0.85 euros per item. “The disposal is obviously inexpensive and not transparent for end consumers. Currently, customers cannot understand what is happening with their returns,” says Asdecker. “In order to motivate retailers to actively advocate more transparency and a lower disposal rate, incentives are needed, such as a returns sustainability seal. The respondents were rather critical of a ban on the destruction of returns based on the French model. Asdecker agrees: “A ban can be easily circumvented by dealers and effective control would be disproportionately costly. Instead, he takes the view that “politicians are reducing existing incentives to dispose of waste and obstacles to donations”.

 

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Link: The current study by the University of Bamberg provides for the first time detailed insights into the background of returns disposal.

Image: iStock – simonkr

//JP