IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v194y2025ics1366554524004952.html
   My bibliography  Save this article

The billion-pound question in fashion E-commerce: Investigating the anatomy of returns

Author

Listed:
  • Marriott, Joshua
  • Bektaş, Tolga
  • Leung, Erik Ka Ho
  • Lyons, Andrew

Abstract

This study explores a critically under-researched aspect of Supply Chain Management (SCM), e-commerce returns in the fashion sector. By combining a comprehensive literature review with empirical data from the UK’s second-largest pure-play fashion retailer, the research offers new insights into the scale and drivers of fashion e-commerce returns. Using a mixed-methods approach, the study uncovers detailed patterns in returned items and the reasons behind consumer return behaviours, revealing the operational complexities these returns impose on reverse logistics processes. In 2022 alone, fashion returns cost the UK industry an estimated £7 billion, while contributing to 750,000 tonnes of CO2 emissions from discarded apparel. A novel framework is proposed to address the challenges associated with high-volume returns, providing practical strategies for improving returns management efficiency. The findings contribute significantly to the SCM field by offering empirical evidence on the specifics of fashion returns, an area previously lacking robust data. This paper not only fills this gap but also provides actionable insights for both academic research and industry practice. By focusing on the management of returns within fashion e-commerce, the study contributes to the development of more sustainable and efficient supply chain strategies, advancing current knowledge within SCM research.

Suggested Citation

  • Marriott, Joshua & Bektaş, Tolga & Leung, Erik Ka Ho & Lyons, Andrew, 2025. "The billion-pound question in fashion E-commerce: Investigating the anatomy of returns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 194(C).
  • Handle: RePEc:eee:transe:v:194:y:2025:i:c:s1366554524004952
    DOI: 10.1016/j.tre.2024.103904
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554524004952
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.tre.2024.103904?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cai, Ya-Jun & Choi, Tsan-Ming, 2020. "A United Nations’ Sustainable Development Goals perspective for sustainable textile and apparel supply chain management," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    2. M. Ali Ülkü & Lynn C. Dailey & H. Müge Yayla-Küllü, 2013. "Serving Fraudulent Consumers? The Impact of Return Policies on Retailer's Profitability," Service Science, INFORMS, vol. 5(4), pages 296-309, December.
    3. Bin Shen, 2014. "Sustainable Fashion Supply Chain: Lessons from H&M," Sustainability, MDPI, vol. 6(9), pages 1-14, September.
    4. Yadong Xu & Guowei Hua & T. C. E. Cheng & Tsan-Ming Choi & Yisong Li & Shuai Liu, 2023. "Retailing and ordering strategies for online apparel retailers facing bracketing purchase behaviour," International Journal of Production Research, Taylor & Francis Journals, vol. 61(9), pages 2840-2852, May.
    5. Xiaoyan Xu & Suresh P. Sethi & Sai‐Ho Chung & Tsan‐Ming Choi, 2023. "Reforming global supply chain management under pandemics: The GREAT‐3Rs framework," Production and Operations Management, Production and Operations Management Society, vol. 32(2), pages 524-546, February.
    6. Janakiraman, Narayan & Syrdal, Holly A. & Freling, Ryan, 2016. "The Effect of Return Policy Leniency on Consumer Purchase and Return Decisions: A Meta-analytic Review," Journal of Retailing, Elsevier, vol. 92(2), pages 226-235.
    7. Tingliang Huang & Hang Ren & Ying‐Ju Chen, 2018. "Consumer return policies in competitive markets: An operations perspective," Naval Research Logistics (NRL), John Wiley & Sons, vol. 65(6-7), pages 462-476, September.
    8. Fei Gao & Xuanming Su, 2017. "Omnichannel Retail Operations with Buy-Online-and-Pick-up-in-Store," Management Science, INFORMS, vol. 63(8), pages 2478-2492, August.
    9. Dissanayake, Geetha & Sinha, Pammi, 2015. "An examination of the product development process for fashion remanufacturing," Resources, Conservation & Recycling, Elsevier, vol. 104(PA), pages 94-102.
    10. Huseyn Abdulla & James D. Abbey & Michael Ketzenberg, 2022. "How consumers value retailer's return policy leniency levers: An empirical investigation," Production and Operations Management, Production and Operations Management Society, vol. 31(4), pages 1719-1733, April.
    11. David R. Bell & Santiago Gallino & Antonio Moreno, 2018. "Offline Showrooms in Omnichannel Retail: Demand and Operational Benefits," Management Science, INFORMS, vol. 64(4), pages 1629-1651, April.
    12. Bahareh Zamani & Magdalena Svanström & Gregory Peters & Tomas Rydberg, 2015. "A Carbon Footprint of Textile Recycling: A Case Study in Sweden," Journal of Industrial Ecology, Yale University, vol. 19(4), pages 676-687, August.
    13. Ayvaz, Berk & Bolat, Bersam & Aydın, Nezir, 2015. "Stochastic reverse logistics network design for waste of electrical and electronic equipment," Resources, Conservation & Recycling, Elsevier, vol. 104(PB), pages 391-404.
    14. Wang, Qiang & Ji, Xiang & Zhao, Nenggui, 2024. "Embracing the power of AI in retail platform operations: Considering the showrooming effect and consumer returns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 182(C).
    15. Huang, Ximin & Gu, Jia-Wen & Ching, Wai-Ki & Siu, Tak-Kuen, 2014. "Impact of secondary market on consumer return policies and supply chain coordination," Omega, Elsevier, vol. 45(C), pages 57-70.
    16. Omar Bentahar & Smaïl Benzidia, 2018. "Sustainable supply chain management: Trends and challenges," Post-Print hal-02511038, HAL.
    17. Paolo Letizia & Morteza Pourakbar & Terry Harrison, 2018. "The Impact of Consumer Returns on the Multichannel Sales Strategies of Manufacturers," Production and Operations Management, Production and Operations Management Society, vol. 27(2), pages 323-349, February.
    18. Mehmet Sekip Altug & Tolga Aydinliyim, 2016. "Counteracting Strategic Purchase Deferrals: The Impact of Online Retailers’ Return Policy Decisions," Manufacturing & Service Operations Management, INFORMS, vol. 18(3), pages 376-392, July.
    19. Iftekhar Hasan & Panagiotis Karavitis & Pantelis Kazakis & Woon Sau Leung, 2025. "Corporate Social Responsibility and Profit Shifting," European Accounting Review, Taylor & Francis Journals, vol. 34(1), pages 1-29, January.
    20. Guo, Jun & Huang, Pinghsun & Zhang, Yan, 2020. "Accounting conservatism and corporate social responsibility," Advances in accounting, Elsevier, vol. 51(C).
    21. Leela Nageswaran & Soo-Haeng Cho & Alan Scheller-Wolf, 2020. "Consumer Return Policies in Omnichannel Operations," Management Science, INFORMS, vol. 66(12), pages 5558-5575, December.
    22. Xuanming Su, 2009. "Consumer Returns Policies and Supply Chain Performance," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 595-612, March.
    23. Soto Zuluaga, Juan Pablo & Thiell, Marcus & Colomé Perales, Rosa, 2017. "Reverse cross-docking," Omega, Elsevier, vol. 66(PA), pages 48-57.
    24. Yang, Hui & Chen, Jing & Chen, Xu & Chen, Bintong, 2017. "The impact of customer returns in a supply chain with a common retailer," European Journal of Operational Research, Elsevier, vol. 256(1), pages 139-150.
    25. Niu, Baozhuang & Chen, Lei & Zhuo, Xiaopo & Yue, Xiaohang, 2018. "Does buy-back induce more fashion sub-sourcing? Contract property and performance analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 113(C), pages 22-37.
    26. Reza Zanjirani Farahani & Nasrin Asgari & Luk van Wassenhove, 2022. "Fast Fashion, Charities, and the Circular Economy: Challenges for Operations Management," Post-Print hal-03696947, HAL.
    27. Sridhar Moorthy & Kannan Srinivasan, 1995. "Signaling Quality with a Money-Back Guarantee: The Role of Transaction Costs," Marketing Science, INFORMS, vol. 14(4), pages 442-466.
    28. Felipe Caro & Jérémie Gallien, 2012. "Clearance Pricing Optimization for a Fast-Fashion Retailer," Operations Research, INFORMS, vol. 60(6), pages 1404-1422, December.
    29. De, Arijit & Ray, Ankita & Kundu, Tanmoy & Sheu, Jiuh-Biing, 2023. "Is it wise to compete or to collaborate? Remanufacturing business models under collective extended producer responsibility legislation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 179(C).
    30. Lu Hsiao & Ying‐Ju Chen, 2014. "Return policy: Hassle‐free or your money‐back guarantee?," Naval Research Logistics (NRL), John Wiley & Sons, vol. 61(5), pages 403-417, August.
    31. Akturk, M. Serkan & Ketzenberg, Michael & Yıldız, Barış, 2021. "Managing consumer returns with technology-enabled countermeasures," Omega, Elsevier, vol. 102(C).
    32. Gulay Samatli-Pac & Wenjing Shen & Xinxin Hu, 2018. "The Impact of Consumer Loss Aversion on Returns Policies and Supply Chain Coordination," International Journal of Operations Research and Information Systems (IJORIS), IGI Global, vol. 9(4), pages 1-20, October.
    33. Xu, Lei & Li, Yongjian & Govindan, Kannan & Xu, Xiaolin, 2015. "Consumer returns policies with endogenous deadline and supply chain coordination," European Journal of Operational Research, Elsevier, vol. 242(1), pages 88-99.
    34. Bruce McWilliams, 2012. "Money-Back Guarantees: Helping the Low-Quality Retailer," Management Science, INFORMS, vol. 58(8), pages 1521-1524, August.
    35. Lin, Yunhui & Wang, Yuan & Lee, Loo Hay & Chew, Ek Peng, 2022. "Profit-maximizing parcel locker location problem under threshold Luce model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    36. Jeffrey D. Shulman & Anne T. Coughlan & R. Canan Savaskan, 2009. "Optimal Restocking Fees and Information Provision in an Integrated Demand-Supply Model of Product Returns," Manufacturing & Service Operations Management, INFORMS, vol. 11(4), pages 577-594, December.
    37. Difrancesco, Rita Maria & Huchzermeier, Arnd & Schröder, David, 2018. "Optimizing the return window for online fashion retailers with closed-loop refurbishment," Omega, Elsevier, vol. 78(C), pages 205-221.
    38. Liu, Zhi & Li, Kevin W. & Li, Bang-Yi & Huang, Jun & Tang, Juan, 2019. "Impact of product-design strategies on the operations of a closed-loop supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 124(C), pages 75-91.
    39. Mandal, Prasenjit & Basu, Preetam & Saha, Kushal, 2021. "Forays into omnichannel: An online retailer’s strategies for managing product returns," European Journal of Operational Research, Elsevier, vol. 292(2), pages 633-651.
    40. Tsan‐Ming Choi & Stein W. Wallace & Yulan Wang, 2018. "Big Data Analytics in Operations Management," Production and Operations Management, Production and Operations Management Society, vol. 27(10), pages 1868-1883, October.
    41. Lee, Chang Hwan & Rhee, Byong-Duk, 2018. "Retailer-run resale market and optimal returns and resale policy," European Journal of Operational Research, Elsevier, vol. 268(2), pages 504-514.
    42. Davis, Scott & Hagerty, Michael & Gerstner, Eitan, 1998. "Return policies and the optimal level of "hassle"," Journal of Economics and Business, Elsevier, vol. 50(5), pages 445-460, September.
    43. Guo, Xiongfei & Chen, Jing, 2023. "Manufacturer’s quality improvement and Retailer’s In-store service in the presence of customer returns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 177(C).
    44. Guangzhi Shang & Bikram P. Ghosh & Michael R. Galbreth, 2017. "Optimal Retail Return Policies with Wardrobing," Production and Operations Management, Production and Operations Management Society, vol. 26(7), pages 1315-1332, July.
    45. Hjort, Klas & Lantz, Björn, 2016. "The impact of returns policies on profitability: A fashion e-commerce case," Journal of Business Research, Elsevier, vol. 69(11), pages 4980-4985.
    46. V. Daniel R. Guide & Luk N. Van Wassenhove, 2009. "OR FORUM---The Evolution of Closed-Loop Supply Chain Research," Operations Research, INFORMS, vol. 57(1), pages 10-18, February.
    47. Regina Frei & Lisa Jack & Sally‐Ann Krzyzaniak, 2020. "Sustainable reverse supply chains and circular economy in multichannel retail returns," Business Strategy and the Environment, Wiley Blackwell, vol. 29(5), pages 1925-1940, July.
    48. Chen, Bintong & Chen, Jing, 2017. "When to introduce an online channel, and offer money back guarantees and personalized pricing?," European Journal of Operational Research, Elsevier, vol. 257(2), pages 614-624.
    49. Reza Zanjirani Farahani & Nasrin Asgari & Luk N. Van Wassenhove, 2022. "Fast Fashion, Charities, and the Circular Economy: Challenges for Operations Management," Production and Operations Management, Production and Operations Management Society, vol. 31(3), pages 1089-1114, March.
    50. Tsan-Ming Choi & Shu Guo, 2018. "Responsive supply in fashion mass customisation systems with consumer returns," International Journal of Production Research, Taylor & Francis Journals, vol. 56(10), pages 3409-3422, May.
    51. Harris, Lloyd C., 2008. "Fraudulent Return Proclivity: An Empirical Analysis," Journal of Retailing, Elsevier, vol. 84(4), pages 461-476.
    52. Mehmet Sekip Altug & Tolga Aydinliyim & Aditya Jain, 2021. "Managing Opportunistic Consumer Returns in Retail Operations," Management Science, INFORMS, vol. 67(9), pages 5660-5678, September.
    53. Nguyen, Van Ha & Choi, Bobae & Agbola, Frank W., 2020. "Corporate social responsibility and debt maturity: Australian evidence," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ratchford, Brian & Soysal, Gonca & Zentner, Alejandro & Gauri, Dinesh K., 2022. "Online and offline retailing: What we know and directions for future research," Journal of Retailing, Elsevier, vol. 98(1), pages 152-177.
    2. Jin, Delong & Caliskan-Demirag, Ozgun & Chen, Frank (Youhua) & Huang, Min, 2020. "Omnichannel retailers’ return policy strategies in the presence of competition," International Journal of Production Economics, Elsevier, vol. 225(C).
    3. Chen, Xiaohong & Tan, Lixia & Wang, Fuqiang, 2024. "Managing consumer bracketing purchases: Optimal return policy analysis," International Journal of Production Economics, Elsevier, vol. 275(C).
    4. Li, Wei & Chen, Jing & Chen, Bintong, 2018. "Supply chain coordination with customer returns and retailer's store brand product," International Journal of Production Economics, Elsevier, vol. 203(C), pages 69-82.
    5. Duong, Quang Huy & Zhou, Li & Meng, Meng & Nguyen, Truong Van & Ieromonachou, Petros & Nguyen, Duy Tiep, 2022. "Understanding product returns: A systematic literature review using machine learning and bibliometric analysis," International Journal of Production Economics, Elsevier, vol. 243(C).
    6. Yang, Guangyong & Ji, Guojun, 2022. "The impact of cross-selling on managing consumer returns in omnichannel operations," Omega, Elsevier, vol. 111(C).
    7. Chen, Jing & Yu, Bo & Chen, Bintong & Liu, Zhuojun, 2023. "Lenient vs. stringent returns policies in the presence of fraudulent returns: The role of customers’ fairness perceptions," Omega, Elsevier, vol. 117(C).
    8. Fan, Huirong & Khouja, Moutaz & Zhou, Jing, 2022. "Design of win-win return policies for online retailers," European Journal of Operational Research, Elsevier, vol. 301(2), pages 675-693.
    9. Chen, Zhongwei & Fan, Zhi-Ping & Zhao, Xuan, 2021. "Offering return-freight insurance or not: Strategic analysis of an e-seller's decisions," Omega, Elsevier, vol. 103(C).
    10. Lin, Jiaxin & Choi, Tsan-Ming & Kuo, Yong-Hong, 2023. "Will providing return-freight-insurances do more good than harm to dual-channel e-commerce retailers?," European Journal of Operational Research, Elsevier, vol. 307(3), pages 1225-1239.
    11. Khouja, Moutaz & Hammami, Ramzi, 2023. "Optimizing price, order quantity, and return policy in the presence of consumer opportunistic behavior for online retailers," European Journal of Operational Research, Elsevier, vol. 309(2), pages 683-703.
    12. Shen, Yinhai & Zhang, Qing & Zhang, Zhichao & Ma, Xinyu, 2022. "Omnichannel retailing return operations with consumer disappointment aversion," Operations Research Perspectives, Elsevier, vol. 9(C).
    13. Chen, Jing & Chen, Bintong & Li, Wei, 2018. "Who should be pricing leader in the presence of customer returns?," European Journal of Operational Research, Elsevier, vol. 265(2), pages 735-747.
    14. Wang, Chong & Chen, Jing & Chen, Xu, 2019. "The impact of customer returns and bidirectional option contract on refund price and order decisions," European Journal of Operational Research, Elsevier, vol. 274(1), pages 267-279.
    15. Fan, Zhi-Ping & Chen, Zhongwei, 2020. "When should the e-tailer offer complimentary return-freight insurance ?," International Journal of Production Economics, Elsevier, vol. 230(C).
    16. Akturk, M. Serkan & Ketzenberg, Michael & Yıldız, Barış, 2021. "Managing consumer returns with technology-enabled countermeasures," Omega, Elsevier, vol. 102(C).
    17. Mandal, Prasenjit & Basu, Preetam & Saha, Kushal, 2021. "Forays into omnichannel: An online retailer’s strategies for managing product returns," European Journal of Operational Research, Elsevier, vol. 292(2), pages 633-651.
    18. Necati Ertekin & Anupam Agrawal, 2021. "How Does a Return Period Policy Change Affect Multichannel Retailer Profitability?," Manufacturing & Service Operations Management, INFORMS, vol. 23(1), pages 210-229, 1-2.
    19. Cao, Yingna & Ding, Ruolin & Yu, Yugang & Yin, Zhe, 2025. "Consumer self-optimization in a virtual showroom experience and its implications on online product return strategies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 194(C).
    20. Chen, Hao-Wei, 2023. "Improving supply quality through the store-initiated returns in wholesale supply chains," International Journal of Production Economics, Elsevier, vol. 261(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:194:y:2025:i:c:s1366554524004952. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.