Retail expert’s industry reaction to H&M introducing a Returns Fee 

Nick Drewe (Wethrift)

THIS week, H&M announced that customers will be charged £1.99 for processing returned orders, both online and in store.

Nick Drewe, retail expert and founder of online discounts platform, Wethrift, provides industry commentary on H&M introducing a fee for returns.

“This week, popular high street retailer H&M announced that it would be introducing a fee of £1.99 to return unwanted items. Previously, returns were free of charge to the customer, but the retailer has announced that the charge for returns (£1.99) will be automatically taken from the customer’s refund. 

“It is unsurprising to see this business move by H&M, as they’re one of a line of popular retailers who are taking the same approach, with competitors such as Zara and Boohoo introducing returns charges in 2022. This year, retailers have faced many challenging circumstances, such as the cost of living crisis putting a strain on consumer spending, as well as a significant increase in the cost of overheads. It is a trend that will likely continue in order to combat costs. 

“Operational costs, such as the energy cost of running distribution centres, have increased significantly. Hence why retailers have begun implementing these small incremental charges, to recoup costs where they can.

“Whereas some competitors such as ASOS are still offering free returns, the retailer benefits from being solely online, meaning that they don’t have to factor in the associated costs with running multiple stores across the country, as H&M does. 

“Interestingly, customers can access free refunds from the retailer if they register to the H&M loyalty scheme. This decision has obviously been made to incentivise more sign-ups to the scheme, which can then be used for further marketing and promotional activities that the retailer will launch in order to remain competitive during the cost of living crisis. 

“It will certainly be interesting to see if this has a negative impact on customer spending and the perception of H&M, as due to the increasing cost of living, consumers are more conscious of spending than ever before. Despite the cost of processing refunds being fairly small, for many, this could be a deal breaker when it comes to choosing to shop with H&M, or with competitors who offer a free and more convenient returns policy.”

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