As returns eat into more of its profits, U.K. retailer Boohoo is weighing charging customers a fee when they send back unwanted merchandise, Bloomberg reported on Thursday (June 16).
While the company charges for international returns, it’s now considering charging for returns across all markets, Boohoo Group Plc CEO John Lyttle told the news outlet.
See also: Zara Limits Free Returns to in-Store Only, Reports No Impact on Sales
Boohoo’s consideration of charging return fees comes after Inditex-owned Zara started tacking a fee onto online returns. No fees are charged for returns at a physical store. H&M and Uniqlo charge U.S. customers a fee if they want to make returns by mail; bringing returns into a store is free, PYMNTS reported on Tuesday.
Lyttle told Bloomberg there are several merchants starting to charge people for returning online merchandise.
Read more: B-Stock, ReverseLogix Team Up on Streamlined Returns Management
The fast-fashion eCommerce merchant based in the U.K. was founded in 2006 and is online only. The brand caters primarily to Gen Z and younger millennials but carries clothing styles intended for most demographics.
“In the UK, the returns rate is a big factor and in international it’s taking us a lot longer to get parcels to customers,” Boohoo CFO Neil Catto told Bloomberg. “Those factors still continue and we’re not expecting those to improve this year.”
Lyttle told Bloomberg that customers are choosier when picking out clothes for special events and more likely to return items. With the pandemic, everyone was wearing clothes where fit was not as important, he said.
Related: Boohoo: Profits Slammed by Returns and Freight Costs
British online fashion and cosmetic retailer ASOS told Bloomberg the company’s overall net sales suffered from the surge in returns in the U.K. and Europe and have a “disproportionate impact on profitability.”
The company doesn’t charge for returns and has no plans to do so, ASOS CEO Jose Antonio Ramos Calamonte told the news outlet.
Read also: Retail Sales Turn Negative, Reflect Broad-Based Consumer Caution
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