How to Build a Circular Economy With eCommerce Returns
Rebecca Fox

April 18, 2023

As an eCommerce retailer, you have a unique opportunity to participate in building a circular economy through your returns process. 

Take action to make a difference by embracing a circular economy, extending the life of products, and driving the shift toward sustainable practices. 

What is a Circular Economy? 

A circular economy is a system of production and consumption that aims to keep materials in use for as long as possible, reduce waste, and minimize the environmental impact of retail. 

Simply put, this means creating a closed-loop system where products are designed to be reused or recycled instead of being discarded as waste. 

In the world of eCommerce, a circular economy can be created by implementing sustainable returns practices. By encouraging customers to return items for reuse or recycling, you can reduce waste and significantly improve your environmental impact. 

The concept of a circular economy is gaining traction as the world becomes increasingly aware of its limited resources and the impact of eCommerce waste on the environment.

The Role of Returns in a Circular Economy

As technology advances and eCommerce continues to thrive, you’re presented with a unique opportunity to participate in building a circular economy by effectively managing your returns process. 

Product returns can be a source of waste and inefficiency, damaging the environment and reducing profitability.

However, with the right strategies in place, returns can also play an essential role in building a circular economy. By implementing a sustainable returns process, you can reduce waste and increase your store’s impact.

Customers are more aware and conscious of the impact their purchases have on the environment than ever before. 78% of customers say a store’s environmental practices influence their buying decisions. 

Having a sustainable returns process can attract eco-conscious customers and build trust with customers who want to buy from a store that’s committed to sustainability.

How to Build a Circular Returns Process

Building a circular returns process includes implementing solutions for managing returned products in a responsible manner, such as refurbishing, recycling, and donating returns. 

By implementing a circular returns process, you can become more sustainable while meeting customer expectations.

1. Offer Sustainable Return Methods

Offering sustainable return methods to customers is a key step toward achieving a more sustainable returns process. 

One way to do this is by partnering with sustainable logistics companies that specialize in eco-friendly transport and handling of returned items. 

Another option is to implement a return drop-off program that lets customers bring returns to a drop-off location without a label or packaging. This enables you to consolidate return shipments, reducing the number of shipments you send back to the warehouse.

By taking the initiative to implement sustainable return methods, you can lead the way toward a circular economy while improving customer satisfaction. 

2. Encourage Donation of Returned Products

By partnering with charities or creating a donation program, you can divert returned products from landfills and give them a second life. 

Besides being a sustainable option, it can generate goodwill among customers who value social responsibility. When customers know that the products they return will be donated to a worthwhile cause, they are more likely to shop with you again.

You can also offer incentives to customers who choose to donate their returned products instead of shipping them back. By incorporating donation options into your returns process you can reduce waste, help those in need, and demonstrate your commitment to sustainability and social responsibility.

3. Repair or Resell Returned Products

Instead of throwing away returned items that are in good condition, you can repair them and resell them at a discounted price. This prevents waste and offers customers an opportunity to purchase sustainable items.

A great way to do this is to work with third-party repair companies and reCommerce companies. 

It’s important to note that not all returned products will be suitable to resell or donate. Create a clear process for assessing the condition of returned items and determining if they can be repaired or resold.

By implementing a system for repairing and reselling returned items, you can reduce waste, offer sustainable options for customers, and contribute to a more circular economy.

4. Recycle Returned Products

Contribute to building a circular economy by incorporating recycling into your returns process. Recycling returned products can help reduce waste and prevent materials from ending up in landfills. 

Partner with recycling facilities to properly dispose of products that can’t be repaired or resold. Returned products can be recycled and used as raw materials to create new products, thereby extending their life, reducing waste, and benefiting the environment.

Embracing recycling as a part of your returns process is a critical step towards building a circular economy, which aims to reduce waste and reuse materials as much as possible.

5. Use a Returns Management System

Using a returns management system like ReturnGO can help you create a more sustainable returns process by automating your returns process and providing transparency into your returns so that you can monitor and improve your environmental impact.

Returns management systems enable you to track and analyze your returns data, providing valuable insights into why products are being returned and identifying patterns and trends. This information can help you make more informed decisions about your inventory management and product design, reducing the likelihood of returns and minimizing waste.

Through ReturnGO you can also offer sustainable return methods such as letting your customers keep or donate their items instead of shipping them back, and integrating with return drop-off services.

By providing customers with convenient and responsible ways to dispose of unwanted items, you can reduce landfill waste and contribute to a more sustainable economy.

6. Communicate Your Commitment

It’s important to let your customers know that sustainability is a priority for your eCommerce store. 

One way to do this is by prominently displaying your sustainability practices on your website and social media platforms. Include information about your recycling, repurposing, or donation programs, as well as any sustainability initiatives your business is involved in.

For example, Silk & Salt, an eco-friendly fashion brand, has a page dedicated to its sustainability statement, outlining its sustainability practices and values. 

You can also incorporate sustainability messaging in your emails, packaging, and product descriptions. Use language that highlights the benefits of sustainable practices such as reducing waste and emissions and supporting local communities.

Additionally, it’s a good idea to add a section to your return policy that outlines how returned items will be processed for reuse or recycling so that customers will know what will happen to the products they return.

By being clear and transparent about your commitment to sustainability you can inspire customers to take part in building a circular economy.

“Every retailer, on every scale, must do their best to create a sustainable business model, and reducing returns will help the amount of emissions to get a bit smaller. The more we narrow it down the better.” – Assaf Neuman, Head of Operations, Silk & Salt

Start Building a Circular Economy Today

Embracing a circular economy approach can help you reduce waste, save costs, and enhance your reputation. 

By optimizing your reverse logistics and leveraging technology, you can bring returned products back into the value chain and reduce your store’s environmental footprint. 

As the world moves toward a more sustainable future, building a circular economy with eCommerce returns is an important step for your store, for the planet, and for customers alike.

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