The ROI of Sustainable eCommerce Returns
May 03, 2023
by Rebecca Fox

Sustainable returns aren’t just good for the environment – they’re also good for your bottom line. By implementing a sustainable eCommerce returns process, you can save money and reduce waste while building customer loyalty and driving repeat business.

The Connection Between Sustainability and ROI

When you make sustainability a priority for your business, it can actually help you make more money in the long run. 

By cutting down on waste, reducing costs, and attracting more eco-conscious customers, you can improve your ROI and help the environment at the same time.

How Sustainable Returns Can Increase ROI

In today’s world, where environmental sustainability has become a major concern for customers and businesses alike, adopting sustainable practices can benefit your eCommerce store in several ways.

Tax Benefits and Other Financial Incentives

In many countries, the government provides tax benefits and other financial incentives to businesses that adopt sustainable practices. 

In recent years, renewable energy has become increasingly recognized as having economic, environmental, and political value, and many government agencies and organizations offer incentives for businesses to invest in renewable energy.

Incentives include things like income tax credits, sales and property tax exemptions, grants, rebates, and “green loans.”

Moreover, the United States Environmental Protection Agency (EPA) has regulations for pollution prevention that manufacturers must follow, so make sure you are in compliance with them.

Some incentives provided by local and national entities include:

  • Business Energy Investment Tax Credit – The Business Energy Investment Tax Credit (ITC) is a federal tax credit for businesses for building or purchasing equipment that generates renewable energy. 

For example, if you buy solar panels for your business, you can get up to 30% credit on their cost. You may also be able to claim city and state tax incentives for installing solar panels for your business.

  • Energy Star – The Energy Star program, run by the U.S. Environmental Protection Agency and the U.S. Department of Energy, helps businesses save money and reduce carbon footprint by providing resources and guidance on energy efficiency.
  • Green Jobs Initiative – The Green Jobs Initiative is a federal program that provides grants to businesses that educate their staff on sustainable business practices.

Stay up-to-date about relevant regulations and use available resources to increase your profits through sustainable eCommerce practices.

Reduced Costs

Sustainable returns practices can help you reduce costs associated with returns management. 

Returns management can generate a significant amount of waste, which can be costly to dispose of properly. By implementing sustainable returns practices, you can reduce the amount of waste generated from returns and save on disposal fees.

For example, you can implement a program to recycle returned items. Working with a recycling company can help make sure that materials are properly sorted and processed.

You can also encourage customers to return items in their original packaging to reduce the need for additional packaging materials.

By minimizing the amount of waste generated from returns, you can save on disposal costs and production costs, reducing your environmental footprint while increasing your bottom line.

Competitive Advantage

Adopting sustainable returns practices can also give you a competitive advantage in the eCommerce market

Today’s customers are increasingly aware of the impact their purchases have on the environment and are looking to buy from businesses that share their values. 

78% of customers say their buying decisions are influenced by a business’s environmental practices – customers want to know that the stores they shop at are committed to sustainability. 

By demonstrating your commitment to sustainability through your returns management process, you can appeal to eco-conscious customers and gain a competitive edge in the market.

Additional Revenue from Returned Products

Sustainable returns practices can also help you generate additional revenue from returned products by implementing a circular economy

By refurbishing or reselling returned items, you can turn what would otherwise be a loss into a profit. This additional revenue can help increase your store’s ROI and improve your bottom line.

Some ways to gain additional revenue from returned products include:

  • Refurbish and resell – Instead of simply discarding returned items, you can repair them for resale. 

This reduces waste and generates additional revenue by enabling you to sell refurbished products at a discounted price.

  • Sell to liquidation companies – Another option is to sell returned products in bulk to secondary markets or liquidation companies. 

These companies will purchase products at a reduced rate and sell them in other markets, providing you with additional revenue from items that would otherwise go to waste.

  • Resell as “open-box” – Returned items that are in good condition can be resold at a discount on your site or on third-party reCommerce sites.

By offering open-box items at a discounted price, you can appeal to budget-conscious customers who are willing to buy products that have been opened or slightly used. 

Think about this – if you don’t resell those returned products, where will they go? 

To the garbage dump, or to sit on your warehouse shelves collecting dust? If that’s the case, it definitely makes more sense to resell returned products than to lose money on them.

Increased Customer Lifetime Value

It is important to remember that customers who are satisfied with your returns process are more likely to continue doing business with you in the future. 

Customer loyalty is one of the most valuable assets your store can have. Loyal customers spend an average of 67% more per purchase than new customers.

When customers feel a strong connection to your store, they are more likely to spend more, buy more often, and recommend your store to others.

Customers are becoming increasingly conscious of their impact on the environment, and they want to buy from stores that do their part to reduce their environmental footprint. 

By implementing sustainable returns practices such as repairing and reselling returned items, using eco-friendly packaging materials, and donating returned items to charity, you can show your customers that you are committed to minimizing waste and protecting the environment.

Customers who prioritize sustainability are more likely to be loyal to businesses that share their values. By offering a sustainable return process, you can attract more customers and increase customer loyalty, repeat business, and positive word-of-mouth referrals.

Real-World Examples of Sustainable Returns Management

Sustainable returns management is becoming more important for businesses of all sizes, as customers become increasingly conscious of their environmental impact. 

Let’s take a look at some real-world examples of how stores are improving their ROI and reducing waste through sustainable practices.

Best Buy

One of the more environmentally-conscious stores, Best Buy is ranked among the top 5 of Barron’s 100 Most Sustainable Companies.

Best Buy aims to protect the environment, conserve natural resources, and prevent pollution by:

  • Reducing carbon emissions
  • Recycling returned products
  • Offering a variety of sustainable products

Between 2009 and 2023, Best Buy has already:

  • Collected over 2 billion pounds of recyclables from customers.
  • Reduced carbon emissions by 61%.

Waste diversion is one of Best Buy’s major goals. 

In order to achieve this, Best Buy offers a recycling program, through which customers can recycle electronics such as phones, laptops, and tablets for free at Best Buy store locations.

The company also has a service that removes TVs and appliances, which is convenient for those who prefer not to dump used items in the trash.

At the same time, Best Buy uses machines that create custom boxes and envelopes designed to fit the products being shipped out, resulting in a 40% reduction in cardboard waste and no need to use plastic fillers.

Patagonia

Patagonia has implemented several sustainability initiatives, including:

  • Worn Wear –  Worn Wear is an online program to trade in and buy used Patagonia gear, encouraging customers to partner with Patagonia to extend the life of those products. 

On this reCommerce site, customers can trade in used Patagonia clothing and receive credit for a used or new Patagonia item.

Most items are cleaned using CO2 technology, saving water and energy (compared to conventional methods) and capturing microfibers.

Through this initiative, Patagonia has awarded over $140 million in cash and in-kind donations to domestic and international grassroots environmental groups that make a positive difference in their communities. 

To encourage other businesses to do the same, Patagonia’s founder Yvon Chouinard and Blue Ribbon Fly’s owner Craig Mathews created a non-profit corporation in 2002.

  • Action Works – Patagonia Action Works connects people with organizations working on environmental issues in the same community. 

The goal of this program is to make it easy for anyone to discover and connect with environmental action groups and get involved with their work.

In addition to those sustainable programs, Patagonia also provides DIY repair and care tutorials to show customers how to keep their gear in usable shape for as long as possible.

As an industry leader in retail sustainability, Patagonia is working hard to become a zero-waste company and strives to set a high standard for businesses and customers to follow.

Ikea

What’s impressive about Ikea is that their commitment to sustainability extends far beyond the initial appeal of their products. In fact, their products are intentionally designed to be reusable and sustainable.

Ikea aims to use only renewable or recycled materials and to provide new solutions for customers to prolong the life of products and materials. This includes manufacturing products using sustainable materials and ensuring that the majority of their waste is recycled or incinerated into energy.

To ensure that products can be reused, refurbished, remanufactured, and eventually recycled, Ikea has developed circular product design principles. 

Designing for standardization and adaptability ensures that products can be reused and refurbished with scalable maintenance and repair services. Standardized parts also facilitate remanufacturing by making it easier to reuse parts in another product.

Another sustainable returns initiative Ikea has implemented is a buyback program in around 30 countries, including at the Ikea store in Vancouver, Canada, which rewards customers for bringing in their used Ikea furniture. Customers simply upload a photo of the furniture online, wait for the return to get approved, and drop it off. 

The returned items, after being cleaned, go to a special section of the store. In 2020 alone, the company helped give 39 million used products a new life. 

By creating circular solutions for both existing and new customers to acquire, care for, and pass on products, Ikea reduces waste and extends the life of their products.

Sustainable eCommerce Returns Initiatives of Industry Leaders

When it comes to sustainable eCommerce returns, many businesses are following the lead of companies like Best Buy, Patagonia, and Ikea and prioritizing waste diversion, offering recycling programs, and designing products with circular principles in mind.

As sustainability becomes a growing concern, eCommerce stores are adopting more sustainable practices. By following the lead of sustainable stores and implementing their own initiatives, more and more businesses are demonstrating their commitment to a greener future while improving their bottom line.

Make Sustainability a Priority for Your eCommerce Business

Implement a sustainable returns process to benefit the environment while also benefitting your business in terms of revenue and profitability.

By making sustainability a priority and taking steps towards reducing waste and improving your returns process, you can create a win-win situation for both your business and the planet. 

Take action today and see how sustainable eCommerce returns can help you achieve your business goals while making a positive impact on the world.

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