Returns at Zalando

Free returns have been an integral part of our service promise since day one. Since there are many questions around this topic, we explain here how we reduce avoidable returns at Zalando and how we deal with returned items.

Why does Zalando offer free returns?

Free returns have been an integral part of our service promise to customers since day one. We aim to provide customers with a shopping experience that is as pleasant as possible by bringing the fitting room into their homes. Our customers can order several items, try them on in the comfort of their own homes and only keep and pay for what they really love and what fits.

What is Zalando doing to reduce the number of returns?

We are working to reduce avoidable returns – for example, because an ordered item of clothing does not fit properly or looks different from what is shown in the store. In order to reduce size-related returns, which account for around a third of all returns, Zalando has its own team working on continuously improving our size advice. To further reduce the returns rate, we are also working on a virtual fitting room where customers can see how an item of clothing fits their personal 3D avatar. We have already been able to reduce the size-related return rate by 10 percent for items for which we offer size-related advice (via size flags and size recommendations – details here). This is not an annual comparison, but a comparison of items with size advice and items in the same category and season without size advice. Size-related returns are highly dependent on the category - for example, it is easier to find a matching T-shirt than a matching pair of jeans.

How many items are returned?

In recent years, Zalando has grown considerably. At the same time, the returns rate is relatively stable: across all our markets, an average of 50 percent of the items ordered are returned.

What exactly happens to the returned items?

When it comes to handling returns, Zalando fully complies with its duty of care under the Circular Economy Law (KrWG). All returned items – completely independent of their actual merchandise value – are carefully checked and sorted by us in a standard procedure. We check whether the item is in perfect condition or whether, for example, stains or loose threads are visible, garments need to be cleaned or ironed before we offer them again through our online shop. It is important to us that every item has a chance to be reused, because destroying goods and returns not only lacks any commercial logic, it also contradicts our understanding of sustainable business.

The majority of our customers only try on the garments once - as is also the case in brick-and-mortar fashion stores - and then return the items in very good condition. Therefore, we are able to offer around 97 percent of all fashion items returned to us directly via the Zalando Shop or our shopping club “Lounge by Zalando”. This figure includes all returns processed in our returns centers - basically all items from our wholesale business as well as items from partners who use our Logistics Solutions. Not included are partners, who do not use our returns management system. They take any returns back into their own inventory in order to either offer them again through our platform, through their own, or alternative channels.

What happens to the returned items from our Partner Program?

As a platform, we offer products in our store ourselves as part of our wholesale model by purchasing items from brands and reselling them on Zalando. In addition, brands and retailers, for example, can make their assortments available on Zalando through our partner program. More than 60 percent of the items that are sold via our Partner program are processed through our returns infrastructure, called Zalando Logistics Solution. This means that our partners have the option of shipping the goods themselves from their own logistics centers as well as using the Zalando logistics network - one of the largest logistics networks for fashion in Europe. This helps our Partners to reduce their logistics and transport costs while at the same time benefit from our professional logistics infrastructure, through which orders are shipped faster and returns are processed more efficiently and, if necessary, reprocessed. This increases the chance of reselling returned items.

Where does Zalando process returns?

In order to offer our customers the best possible service, we have built up one of the largest European logistics networks for fashion and lifestyle in recent years. In addition to our logistics centres, which focus primarily on processing and shipping orders, for several years we have had a dedicated network of specialised return centres close to the sales market. These locations are located throughout Europe so that we can process, refund and resell returned items as quickly and locally as possible. The returned items are not shipped directly from the return centres for the next order, but are first consolidated and brought back in bulk to one of the logistics centres within our network. This is also much more sustainable than sending individual, half empty packages with returns from the customer directly to one of our logistics centers.

Don't the returned items then travel very long distances?

The garments returned to us are collected in specialised return centres and finally brought back to one of our logistics centres, from where they start their journey to our customers again. We decide exactly where to store the items based on factors such as the likelihood of resale in the region or market. We have developed our own algorithm based on predictive analytics and are constantly improving it, so the predictions become more and more accurate. Broadly speaking, our algorithm is taking into account e.g. the sales data of the last weeks for the respective items as well as the current number of stocks in a logistics site. It can therefore happen that a returned item travels comparatively longer distances to enable resale and thus further use.

Does Zalando use trucks as mobile warehouses?

We certainly do not use trucks as mobile warehouses. From an economic point of view, this does not make sense - every kilometer traveled is linked to costs and apart from that we have sufficient storage capacity within our European logistics network. We transport the goods from our returns centers across Europe to our 12 logistics centers that are close to the region with the highest resale probability to enable the reuse of returned items.

What happens to the items that cannot be sold anymore?

Returned items that we can no longer offer via the Zalando Shop - be it merchandise from the previous season, items that are only available in a few sizes, or those with minor defects - we can offer throughout Germany in our Zalando Outlets. Items from previous seasons are also frequently offered on “Lounge by Zalando”. In addition, we take the opportunity to donate remaining stock to organizations such as humedica or sell it to wholesale partners. This way we avoid destroying goods if they can still be used in their original form. In order to fully comply with our duty of care, we only work with selected aid organisations and wholesale partners whose headquarters are located within the EU and who are therefore also bound by applicable laws.

Does Zalando destroy returns?

Only in exceptional cases, we are required to destroy articles, for example if this is necessary for health or legal reasons (e.g. in the case of product recalls when limit values are exceeded, pollution, pest infestation) or if products are broken and cannot be resold.

Returns are one main driver of your carbon footprint. What are your plans to reduce CO₂ emissions?

We are aware that the delivery and returns of our parcels generate CO₂ and we are looking into actions to reduce our impact on the climate. We are trying to reduce the number of unnecessary returns with more detailed product descriptions or improved size advice. In terms of returns, this means that if partners use our “Zalando Return Solutions” returns management system, these emissions are included in our calculation. If the returns are processed within our partners' logistics processes, they are not included in our calculations and are therefore not taken into account in our compensation. Our goal is to reduce the number of returns: through sizing advice, by improving product descriptions or optimizing the presentation of the product. We also offer our customers the option of returning different orders in a single package. Our industry is facing some major sustainability challenges and a general waste problem - and we don't have all the answers yet. But thanks to our size, we are able to address these challenges and work with others in the industry to drive positive change.