Margarine, cornflakes and eggs. This is what’s believed to be the first ever online shopping purchase. The technologically savvy customer behind it? A 72-year-old woman from Gateshead, England, who ordered groceries from a local supermarket using her TV remote. The year was 1984, and the grocery delivery service was a local council initiative to assist the elderly. Forty years on, the online shopping world is unrecognisable.

Australians set a new record last year – we spent $69 billion buying goods online, up 12 per cent from 2023. According to Australia Post’s annual eCommerce report, $9.6 billion was spent on fashion and apparel alone.

It’s a big pie, and retailers continue to vie for their slice with promises of free returns and lengthy grace periods. This leads Australians to buy an average of 56 new items of clothing per year – more than anyone else in the world.

Some shoppers check-out multiple sizes of the same item, turning their homes into pseudo-changing rooms (a practice called “bracketing”). Others buy items to wear for a single occasion before returning them (“wardrobing”).

It’s hard to pin down the exact percentage of items that are sent back, but online fashion retailers generally see some of the highest levels of returns. The Iconic, Australia’s most-visited fashion site, says its return rate sits at about 30 per cent, a figure that’s regarded as the industry average.

New industries and supply chains have been created to streamline the returns process (what’s known as “reverse logistics”). In 2018, reverse logistics technology company Optoro found that 88 per cent of American shoppers thought returned goods are put back on the shelf and resold.

The truth is more complicated. Dealing with returned goods is a costly undertaking for brands. Returns go back to manufacturers, distribution centres or sorting premises for individual evaluation. They may be sent off to be repaired, recycled, resold, cleaned, sent to landfill locally or, more than often not, overseas.

“By the time [an item] goes through all these steps, often it’s cheaper to destroy it or put it into landfill,” Sarah Neill, founder of fashion tech app Mys Tyler, tells Broadsheet. “It’s a really big sustainability issue. It’s a really big profitability issue. Everybody in the industry is really focused on trying to reduce returns, but nobody’s been successful yet.”

“Returns abuse and high return rates in general are not good for the customer experience, have an impact on the environment with the associated carbon emissions and add significant costs to our business,” concedes The Iconic’s chief commercial and sustainability officer Gayle Burchell. “Reverse logistics is complex and costly.”

Despite this, The Iconic claims that of the garments returned by its customers, 98.6 per cent are resold. Forty-eight per cent are resold within a week, and 90 per cent are resold within a month. The remaining stock that can’t be resold is returned to suppliers, donated to charity Thread Together or sold to local third-party resellers.

Regional New South Wales-based womenswear label Birdsnest has one of the most generous returns policies in the country, giving customers 365 days to return items (it’s worth noting the median time for its returns is only 14 days). Founder Jane Cay says 23.7 per cent of purchases were returned in 2024, totalling 46,946 items. Despite a loyal customer base, over a quarter (26.1 per cent) of Birdsnest’s potential revenue is lost to returns.

Stats like this make it easy to understand why some retailers are pulling back on free returns. In 2022, Zara began charging for online returns. In 2023, Asos Australia introduced a $8.99 return fee, with its UK counterpart following suit late last year. According to Refundid, businesses charged up to 30 per cent more on return shipping costs in 2024 than they did in 2023.

But charging for returns isn’t the only tactic for reducing what’s sent back. Airrobe is a tech platform self-described as a “pre-loved centralised designer platform” that allows customers to rent out or sell their fashion purchases. “Key retailers … have been seeing a slow in return rate after introducing Airrobe’s solution,” founder Hannon Comazetto tells Broadsheet. She says one brand has seen a 14 per cent decrease in the number of returned items and a 19 per cent decrease in the individual value of returned items (meaning fewer high-value pieces have been sent back).

Comazetto sees overly generous returns policies as a “race to the top” though warns that implementing tighter return windows and return fees can reduce customer loyalty “if not balanced with enhanced post-purchase experiences”. Resale and renting models can encourage consumers to extend the life of their purchased garments, increasing the likelihood of holding onto online purchases and reducing the rate of returns.

While we’re witnessing a rise in peer-to-peer renting and resale programs locally, international players like Archive Resale are spearheading business-owned resale platforms. One Australian resale startup, Rntr, is angling to do the same here.

Rntr offers a “return as a service” option, where it works with fashion brands to repair or refresh returned items before selling them as pre-loved on the brand’s own site or third-party marketplaces. “The labour, cost and time involved is considerable,” founder Shanya Suppasiritad tells Broadsheet. “That’s why [we] offer [an] end-to-end service. Working with multiple brand partners has allowed us to set up a dedicated, efficient operation and invest in the latest technologies, from AI [and] cleaning to photography.”

Mys Tyler approaches the return conundrum a different way. The tech platform uses a mix of AI and real-life creators to match up women who share a similar height, shape, size and style to gain relevant clothing and styling recommendations. Founder Neill knows that sizing alone isn’t enough to ensure a garment purchased online fits, which is what tools like Fit Finder and True Fit rely on.

“We think the solution lies in showing products on a diverse range of bodies, helping customers make more informed decisions across suitability, styling and sizing, ultimately reducing return rates and improving satisfaction,” Neill says. And it’s working; the average return rate after using Mys Tyler is 5.9 per cent – 80 per cent lower than the industry average.

There are no current industry-wide solutions to our returns dilemma. While tech companies innovate reverse logistics systems and governments to and fro on policy, consumers can help minimise the returns juggernaut by simply making more considered, thought-out online purchases. Take a look at the measurements, read reviews by real customers, and ensure you really do want something. After all, no one likes lugging their parcels back to the post office.