The volume of textiles and textile products destroyed in Europe is humongous. A new study says that it can be as high as 594,000 tones every year i.e. as high as 9% of all textile products put on the market. The lower range of the estimates are 264,000 tonnes and 4% respectively.
- The estimates come from the report Volumes and destruction of returned and unsold textiles in Europe’s circular Economy from the European Environment Agency’s European Topic Centre on Circular Economy and Resource Use (ETC CE).
- The authors of the report are Tom Duhoux, Dina Bekkevold Lingås and Lars Fogh Mortensen.
THE PROBLEM WITH RETURNED CLOTHING: Overall, in Europe, the average return rate for clothing is estimated at 20%—one out of every five pieces of clothing is returned. Online product returns for footwear range between 22% and 37%. Overall, the average return rate for footwear in the EU is estimated at 30%. Winter shoes and boots are the most returned footwear product category.
- Among online shoppers in the EU, 14% state that they have returned an item in the last month. Micro-to-small web shops have a significantly lower return rate than medium-to-large web shops. Overall, young adults (18–24 years) have the highest product return rate.
- The return rate for products sold online is up to three times higher than for products sold in physical stores. With the growth of online sales, return rates have also increased.
- Why so: In the EU, consumers who have bought a product or service online have the right to cancel and return their order within 14 days without justification. For products bought in a shop, there is no EU legal right of return of goods for exchange or refund unless the item is faulty. However, many shops voluntarily allow customers to return or exchange goods during a certain time period.
THE RETURNS PROCESS: Product return processes are complex, usually span different locations and can take weeks to complete. This complexity has a significant impact on resale potential—especially for seasonal and fast fashion products—and could lead to significant reductions of the original selling price (markdowns). The costs of handling returns are substantial.
- These could include costs for logistics, sorting and handling returns, replacements or refunds, customer care and asset depreciation for markdowns, liquidation or destruction.
- Many retailers are unaware of the true costs of returns. It costs a retailer approximately 55% to 75% of a product’s retail price to process each online return.
THE PROBLEM WITH UNSOLD TEXTILES: There are also large volumes of unsold textiles in Europe. These are neither sold online nor in physical shops. Unsold textiles are often due to rapidly changing fashion and the many new designs put on the market throughout a year.
- Unsold products can be either overstocks (products that are produced but have never been sold), obsolete products (products for which there is no longer any demand) or products that are damaged or recalled by their manufacturer because of quality issues.
- Overstock and obsolete products are the result of a mismatch between what is produced and demanded. This mismatch can be due to difficulty in forecasting, market dynamics and a conscious business strategy.
- The industry, particularly fast fashion, is characterised by a large variety of goods produced. This is called product diversification in terms of styles, colours and sizes, as well as differences between seasons. However, the more diverse the portfolio of products, styles, colours and sizes, the harder it is to correctly predict how much of each will sell within a current season.
- Not only is a diverse portfolio on average less costly to produce, having a high product diversification and producing large quantities is less costly on average per product than producing smaller quantities and fewer types of products. This situation then leads to the overproduction of product types, styles, colours and sizes.
DESTRUCTION OF RETURNED AND UNSOLD TEXTILES: The practice is not new. Destroying returned and unsold clothing and other textiles has been happening in the fashion industry since at least the 1980s.
- The destruction of customer returns and unsold textiles have direct environmental and climate impacts. These arise from the processes of handling returns and unsold textiles, and the destruction itself. Importantly, there are also indirect impacts from their original production, even if they are never used.
BAN ON DESTRUCTION OF TEXTILES: A key action proposed in the EU Strategy for Sustainable and Circular Textiles was to stop the destruction of unsold and returned textiles.
- On 5 December 2023, the Council of the European Union and the European Parliament reached a provisional political agreement on a proposed regulation establishing a framework for setting eco-design requirements for sustainable products (ESPR).
- Article 20 of the proposed ESPR establishes a general obligation of transparency for economic operators who discard unsold consumer products, including disclosing information on the number of unsold consumer products discarded per year.
- The EU’s co-legislators are deciding on a direct prohibition on the destruction of unsold textile products. Small and micro companies would be exempted from this ban, while medium-sized companies would benefit from a 6-year exemption. This ban would be applicable 2 years after the entry into force of the regulation.
