Last week I posted on X that women return four times as many online purchases as men. It sparked some good discussion and got people thinking, so I thought I'd write a slightly longer piece on it, drawing on the conversation that took place on X as well.
It all started when I compared Papu's return rate with that of Saarni – Gentlemen’s Boutique over the same period this spring and summer. Papu's return rate was just over 18 per cent, while Saarni's was well under 5 per cent. Hence the quick conclusion: women return roughly four times as often as men.
Papu vs. Saarni
Of course, it isn't that simple, because we're comparing apples and oranges here. Saarni – Gentlemen’s Boutique (SGB from here on) isn't just a clothes shop: it sells plenty of other products too, and a lot of its customers are women. Papu, on the other hand, is far more of a clothing store, with only a marginal amount of anything else (earrings, for example). It's also worth noting that classic menswear has less variation than, say, women's dresses. And women's body shapes vary considerably more than men's.
Even so, the return rates of Papu and SGB are strikingly different. Both have similar size charts and product information, so that doesn't necessarily explain it. Then again, women's clothing has more variation in cuts and fabrics. So even if the measurements look spot on in the chart, the garment won't necessarily drape and fit the way you'd expect.
Perhaps one of the most significant differences between Papu and SGB is that every Papu order comes with instructions on how to return it and a return code for a free return. In other words, returning has been made easy. That isn't the case at SGB, where customers have to send their order back at their own expense. The return instructions can be found in SGB's online store, and of course on Papu's too. The quick conclusion here would be that SGB loses online orders because returning has been made difficult, but it isn't necessarily that simple.
When I was at Tam-Silk in Kangasala, they had the same practice as SGB: returns were at the customer's own cost and the instructions were on the online store's website. Back then I ran a test where return shipping was made free and the return instructions were included with the order. The result was that online sales didn't grow at all, but the number of returns multiplied. Free returns were quietly dropped. I don't know what the practice is now, as I left at the beginning of 2021.
“Super-returners”
We analysed Papu's online return data (with AI, naturally) and took a closer look at the 150 customers who had returned the most. Of these, 112 (75%) had returned more than 50% of their purchases. 66, or 44%, had returned more than 60% of their purchases. 21, or 14%, had returned a whopping 90%+ of everything they'd bought. So you didn't make this list by ordering once and sending it back; the median top returner had placed 5 orders in 36 months, with over a thousand euros in gross sales. The median return rate among these 150 people was 65.6%.
This is, however, a very small minority. Papu's data includes over 55,000 customers, so 150 of them is a tiny group of people.
Why make such a fuss about returns?
Returns cost Papu money and they aren't eco-friendly. That's the short version. The longer version is that they really do cost an awful lot. Let me break down a bit of where the cost comes from. The first thing we pay for is payment processing. When a customer buys from an online store, the payment provider (e.g. Paytrail, PayPal etc.) takes a small cut of the payment.
The next cost is picking. Our logistics partner is Storia, whose warehouse in Hyvinkää holds our products. They pick the orders, pack them and send them off. That costs money, of course, and we don't get it back even if the customer returns the item.
The third cost is shipping. Posting a parcel to the customer costs money, and it costs pretty much exactly what we charge for postage. In other words, we don't make a margin on it, because shipping fees are roughly the same in every online store and taking a margin on them is hard to do competitively.
The fourth cost is when the parcel comes back. We pay for that postage, and it costs just as much as sending it to the customer. The fifth cost is Storia receiving the item, inspecting it and putting it back on the shelf for sale. The sixth cost is when we refund the customer, at which point the payment provider takes another cut as the money moves. I'm not even counting the working hours we spend handling returns, but that time obviously has to come from somewhere.
So that, without putting euros on it, is a rough outline of what returns cost and why every online store tries to reduce them. But it's worth understanding that every return is a cost that ends up in the price of the garment – meaning those who don't return also pay for the returns of those who send back a lot of their orders.
And let's not forget that parcels travelling back and forth on rubber tyres for nothing is never going to be an environmental good deed. Of course, we could then start debating whether buying clothes is ever an environmental good deed when you can get them second-hand too. But let's not go there this time – although I have said before that a brand can be as responsible as you like, but the whole returns merry-go-round isn't easy to make responsible.
On the reasons for returns
We ask for the reason for the return on the form that customers are asked to include with their return. By far the most commonly given reasons are size too small and size too large. Don't jump to the conclusion that the size charts are wrong or that certain products don't match standard sizing, though, because the funny thing is that the same product gets roughly as many returns for being too small as for being too large. My own wild guess is that the cut and the fabric simply don't suit everyone. Then of course there are some customers who order two sizes and return one.
The next most common reasons are “I changed my mind” or “the product didn't meet my expectations”. I can't really say much about the first one, so let's think about the second. The problem here may be that the product has been photographed in a way that, for example, makes the colours look different from what they are, or the product looks so different on the model. We've all seen those Temu clothing memes where the item looks like a work of art on the model, and then when you buy it for yourself you end up looking like a character from a comedy sketch. To avoid this, we almost always have our products photographed in the studio as cut-outs on a white background, so the picture shows nothing but the garment. That way its true colour and shape come through best, and neither a model nor a background can influence how it looks. I'd guess that, to some extent, the feel and thickness of the fabric come as a surprise, because you just can't capture that in a photo.
What could be done to improve things
A few suggestions for tackling this problem came up on X. One was that customers could get a significant discount if they waived their right to return their order. That, however, is illegal, as the right of return is enshrined in law and can't be sold.
Another suggestion was whether you could lose the right to free returns if you use it enough times. My guess is that a customer like that would stop ordering as soon as they heard they'd no longer be given free returns. By the way, free returns aren't a legal right, even though there's some misinformation going around to that effect too.
A number of comments called for sizes to be standardised. Sizes already are standardised, but not all manufacturers follow them – and then there are all the different cuts and fabrics that pull the rug out from under standard sizing.
Then there were comments about online stores sharing blacklists of customers who return “too much”. I don't know how GDPR would feel about that, but I'd guess not very warmly. What I do know, though, is that big online stores put customers on their own blacklists if they return too much. I'd guess getting onto a list like that already takes quite a few orders and returns.
The comments also included a suggestion for a scanner that would scan a person and tell them exactly which garment would fit them size-wise. I've seen start-ups like this in my time, but as long as the likes of Zalando or Boozt don't adopt them, they just don't seem to work for one reason or another. My own guess: would you want to prance around naked in front of your phone camera so it can scan your perfect clothing size? Not many people would.
Finally
In my opinion, Papu's return rate is high, and we here at Papu need to try to come up with ways to improve how we do things so that as few products as possible are returned. We're motivated by both financial and environmental reasons.
I also believe we have very few customers who order and return clothes just for fun. I'd certainly like to believe that our customers order what they need and return items if they feel that, for one reason or another, the product isn't right for them after all.
This is a tricky subject, though, and I know that writing about it gets some readers' blood up, because it feels like customers are being blamed. That's not the intention. The intention is simply to shed some light on the issues around returns from our side, as a business.
I deliberately gave this post a rather provocative headline, so let me share a genuinely interesting fact. If I remember rightly, women account for around 80% of all online clothing purchases. In other words, whatever the men's return rate may be, there's a completely different amount of money moving in womenswear than in menswear.
-Tuomo Saarni, CEO of Papu
P.S. If you have thoughts on this, or you've seen good practices at other manufacturers, email me directly at tuomo.saarni@papudesign.com. If we come up with a good way to reduce returns, I promise to share it with everyone else free of charge, because the world would be a better place for it.
