The activities of the giant Amazon have a significant impact on the environment. The company is working on its environmental impact and has set itself the goal of carbon neutrality by 2040. One of the most problematic aspects still remains parcel returns, which represent staggering financial and environmental costs.
E-commerce, there is no denying it is practical, especially with the Amazon platform. A few clicks and your order arrives on your doorstep a few days later. This one does not suit you? No problem, just a few more clicks and you can backtrack and return your purchase. This gesture may seem harmless, but it is harmful, whether for retailers or the environment.
The Dark Side of Returns
Product returns after an online purchase have become a very common gesture for anyone using this mode of consumption. On the retailers’ side, their management is a calamity. Over the year 2022, lost sales by merchants cost 743 billion euros in the United States alone, a sum greater than the GDP of a country like Poland for example. As for carbon emissions, it really isn’t any prettier to see since in the same year, returns generated 24 million tonnes of CO2. And these are on the rise in the United States, with the referral rate rising from 8% in 2019 to 16% in 2022. (See graph below)
In terms of logistics and cost, merchants face a real nightmare. Each returned item must be sent to processing warehouses; transport and packaging costs then skyrocket. By some estimates, this step can cost as much as 66% of the initial cost of a $50 item. On top of that, the return process takes two to three times longer than shipping, further impacting overall costs.
Final destination for returned items
When a returned item arrives at one of Amazon’s warehouses, it must be opened and manually inspected by employees to determine its fate. From a logistical point of view, it is very heavy, especially when it comes to colossal volumes as is the case for a company that sells so much.
After the inspection phase, retailers are faced with a dilemma: what to do with the returned products? If the item can be relisted, it will be redirected to another warehouse to be returned later. In most cases, however, it is much more economical to throw it away. The impact on waste production is then absolutely catastrophic, even if Amazon is trying somehow to improve the situation.
Amazon is a company that has clearly revolutionized e-commerce. If this revolution has been a real upheaval, it is also because it has conditioned us to hide what is going on behind our act of purchase. We don’t lose money returning an item, the merchant does. We don’t necessarily smell the smell of diesel from trucks carrying tons of unwanted items. Nor are we in the minds of the workers who sweat blood and water in the warehouses to deal with our undesirables. Every purchase return is a step backwards that worsens the environmental crisis and we are responsible for it.
Source : The Conversation
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