As holiday shoppers return items purchased during Black Friday and Cyber Monday online shopping sprees, more US retailers could tell them to keep items that cost more to ship back than they are worth.

This year, 59 percent of retailers offer so-called “return-less” or “keep it” policies for unwanted products whose returns costs exceed their value, according to returns services firm goTRG, which surveyed 500 executives at 21 major retailers, including Walmart and Amazon.

Last year, 500 retail executives said 26 percent of companies had such policies, said goTRG CEO Sender Shamiss, whose company counts Walmart among its clients. They didn’t break out the number of companies involved in last year’s survey.

As retailers adopt technology to root out excess costs, more are embracing return-less policies for certain online purchases, said Shamiss, who declined to name companies that use them. That information is “not something that retailers want out there” due to worries the policies could be abused by shoppers, he said.

The previously unreported survey results come as US shoppers are expected to return $173 billion worth of holiday purchases in the US this year, 28 percent more than last year, according to Optoro. The firm helps retailers manage returns, which typically rise after pre-Christmas sales like Black Friday and Cyber Monday and continue beyond Christmas.

“Our returns Super Bowl starts the day after Black Friday and goes into February,” said Optoro CEO Amena Ali, comparing her sector’s busy season to one of America’s biggest sporting events.

The typical return costs retailers about $30. Returns drain profits because they must be transported, sorted and resold - often at a discount - or disposed of at a loss. That has helped prompt almost 90 percent of retailers to revise a range of policies this year, Ali said. Those changes also include offering store credit, charging for some returns and encouraging shoppers to bring online purchases back to physical stores.

“You just can’t afford to ignore it,” she said of returns costs.

Reuters recently viewed a Walmart YouTube tutorial from February that helps marketplace sellers set parameters for their own return-less policies.

Walmart said it balances customer experience and its bottom line when considering exchanges and returns. That includes testing ways to help third-party sellers manage costs. The company called the training video out of date and it is now labelled private. Seventeen shoppers interviewed by Reuters said companies including Amazon, Chewy, eBay, Temu, Keurig, Wayfair and t-shirt seller True Classic told them not to return goods valued from around $20 to as much as $300 - including several that were defective or shipped in error.

Amazon said it allows customers to keep items on “a small number of returns as a convenience and to help keep prices low.” Wayfair customers in certain cases may have the option to keep items at a discount, according to the online furniture seller. Other retailers named by the shoppers did not respond to requests for comment.

The percentage of returns was nearly double pre-pandemic levels last year, standing at 16.5 percent of total US retail sales - or $816.8 billion worth of goods, according to data from Appriss Retail and the National Retail Federation.

Sellers of underwear, bedding and food were among the first adopters of keep it returns due to hygiene concerns or health safety rules. Shapewear seller Shapermint uses the policy to build loyalty by asking shoppers to donate the items or gift them to friends, said Gabrielle Richards, brand director at Trafilea, which owns the company.

The practice went mainstream during the e-commerce boom of the early pandemic, when shipping and delivery costs soared and warehouses were bursting at the seams. Companies stopped taking back unwanted t-shirts, pet toys or furniture that would increase costs and add to supply-chain backups.

These days, retailers weigh the cost of the return against the value of the shopper, with big spenders more likely to be eligible, experts said.

Eight of 17 shoppers interviewed by Reuters were told to keep goods purchased on Amazon, mostly from outside sellers. Items ranged from low-value goods like underwear and a raincoat to an incorrectly-sized mattress.

Amazon, Shapermint and other retailers battle potential fraud with technology that enables them to extend the service to trusted customers.

“We take fraud very seriously and when bad actors attempt to evade our controls, we take action and work with law enforcement to hold them accountable,” Amazon said.

Some sellers’ anti-fraud efforts have alienated shoppers.

Los Angeles-based photographer Pamela Peters late last summer got a refund for a $300 portable air conditioner that blew hot air - but only after she sent the Amazon seller a picture of the unit with the power cord cut.

“It’s so wasteful,” said Peters, who disposed of the unit before buying a replacement from a different retailer.

By Lisa Baertlein, Arriana McLymore and Siddharth Cavale

Learn more:

Case Study | Fashion’s New Playbook for Online Returns

The e-commerce boom may have cooled but online returns rates remain high, and the costs of processing them are more expensive than ever. BoF unpacks how retailers can reduce the costs of returns and protect profit margins, while improving customers’ shopping experience to generate higher sales.

Victoria’s Secret & Co. reported a larger-than-expected quarterly loss amid a rise in investment in marketing and technology, but the company said its efforts are starting to pay off.

A third-quarter loss of 86 cents a share, after excluding some items, was deeper the average analyst estimate of an 80-cent loss. Comparable sales, meanwhile, posted a seventh consecutive quarterly decline. However, the company said its sales in November are the “best monthly performance in nearly two years and further evidence that our initiatives are working.”

The intimates retailer has been working to reinvent its image after years of backlash to its sexy imagery that stopped resonating with consumers. During an investor conference in October, the company emphasised the expansion of its swim and sport categories, as well as the fashion show, known as the World Tour, which were meant to drive traffic at stores.

In addition to the increase in investments, the company blamed declining sales for its most recent loss.

“Our teams have been resiliently focused on what is within our control and working tirelessly on multiple growth initiatives designed to create momentum,” chief executive Martin Waters said in a statement.

Shares alternated between losses and gains in late trading. The stock has declined 34 percent this year through Wednesday’s close, compared with a 17 percent increase in the Russell 3000 Index.

A separate report Wednesday showed PVH Corp., the owner of Calvin Klein apparel and another maker of intimates, reported third-quarter earnings that missed estimates. The company also projects a weaker-than-expected performance in the current period. The shares fell 4 percent at 5:01 PM. in extended New York trading.

By Olivia Rockeman

Learn more:

Why Victoria’s Secret Is Bringing Sexy Back

A much-hyped image revamp has failed to win back customers. On Thursday, the company told investors about Plan B: spruce up stores, expand into new categories and bring back a bit of the old Victoria’s Secret. As one executive put it, “sexiness can be inclusive.”

Swiss luxury watch brand Audemars Piguet is set to renew its longstanding ties to American pop culture with the release of a watch collaboration with hip-hop star Travis Scott and his label Cactus Jack Records.

In partnership with Scott, Audemars Piguet will release a limited-edition version of its Royal Oak watch Friday in a new ceramic, as well as putting out a capsule collection of co-branded merchandise from the Swiss watchmaking house and Cactus Jack.

The new watch will be formally unveiled at an event in New York this evening and will feature a number of motifs from Scott’s Cactus Jack label, including a moon phase decorated with a luminous version of the hip brand’s logo — a smiley face with its mouth sewn shut.

“Travis could raise an army,” said Audemars Piguet’s chief executive François-Henri Bennahmias in an exclusive interview with The Business of Fashion. “He’s got such a power. People follow him in a major way.”

Scott, 32, is one of the most successful hip-hop artists of his generation. His fourth studio album Utopia, released in July, had more than 650 million global streams in its opening week, making it the most commercially successful hip-hop album of the year.

The collaboration is likely to be remembered not just for a wristwatch co-designed by Scott, but for the collection of hoodies, T-shirts, jackets, pyjamas, shorts and caps sold through Scott’s own e-commerce platform.

“People will go nuts when they know that AP and Travis have made merch together,” said Bennahmias. “It breaks pretty much every code. Is it going to be successful? We could have multiplied the quantity by at least 10 times and still been successful.”

Audemars Piguet, Bennahmias said, would make “zero” profit from the clothes and accessories, which instead would fund the Cactus Jack Foundation, which grants scholarships to disadvantaged young people.

The collaboration will also be remembered as François-Henri Bennahmias’s swan-song before he retires from the role of Audemars Piguet’s chief executive at the end of this year, a post he took up in 2012 having joined the company almost 30 years ago.

Bennahmias is recognised as one of the watch industry’s most disruptive and influential figures, transforming the family-owned company from a dusty high-end watchmaker into one of the most recognised and in-demand names in luxury.

It was Bennahmias who, while running the company’s US operations, brought it together with Muhammad Ali and Arnold Schwarzenegger for the Time To Give auction in the year 2000, and then forged an unlikely alliance to street culture with the Royal Oak Offshore Jay-Z 10th Anniversary in 2005, a watch collab widely considered by industry observers to be a tipping point for the typically conservative Swiss watch industry.

AP has since continued to align itself with popular culture, nurturing high-profile relationships with stars of film, music, sports and the arts, including LeBron James, Kevin Hart and Ed Sheeran, powering rapid sales growth for its watches which have an average price of 42,000 Swiss francs ($47,970).

Bennahmias said he expects Audemars Piguet’s 2023 revenues to grow by around 200,000 Swiss francs to top 2.3 billion Swiss francs ($2.6 billion).

The partnership with Scott might have been announced sooner. In June this year, a Texas grand jury declined criminal charges brought against Scott after 10 people, including a nine-year-old girl, were killed in a crush at a festival he founded in 2021. Scott was widely criticised for his response to the Astroworld Festival disaster. Bennahmias declined to comment on the incident, but said that Audemars Piguet had waited until the jury’s decision before activating the collaboration, having first met Scott in 2020 when he was a client.

OXFORDSHIRE, United Kingdom — Wednesday morning at The Business of Fashion’s VOICES 2023 gathering, editor-in-chief Imran Amed and McKinsey senior partner Achim Berg offered a first look at the “The State of Fashion 2024″ report, followed by a series of panels and presentations exploring the forces reshaping the global fashion system.

Speakers including Bottega Veneta creative director Mathieu Blazy, new Gap CEO Richard Dickson and Italian fashion entrepreneur Brunello Cuccinelli discussed craft, culture, brand building and more, while a panel of sustainability stakeholders examined the colonial dynamics embedded in fashion’s climate crisis.

The author has shared a YouTube video.You will need to accept and consent to the use of cookies and similar technologies by our third-party partners (including: YouTube, Instagram or Twitter), in order to view embedded content in this article and others you may visit in future.

The State of Fashion 2024

Consumers plan to spend as much as 16 percent less on fashion next year, BoF and McKinsey’s “The State of Fashion 2024″ report found. Berg said this was the latest sign that a softening of the fashion market seen in the second half of 2023 will continue next year.

Opportunities for growth remain, however: notably rebounding travel, which will help brands reach new shoppers with tourist flows expected to hit 110 percent of 2019 levels next year, surpassing pre-pandemic volumes for the first time.

Brunello Cucinelli’s Hopeful AI Vision

In a conversation with BoF’s Imran Amed, Italian fashion entrepreneur Brunello Cucinelli discussed the value of human craftsmanship and his vision of  “humanistic, contemporary capitalism.” “There should be a balance between profit and giving back. Giving back elevates your soul,” Cucinelli said.

After placing ownership of his fast-growing company in a family trust and hiring a pair of co-CEOs to help support his business, Cucinelli has shifted to a creative director role at his namesake brand. He hopes the moves will protect the future of his brand — values intact. “I want my company to be there for another hundred years, and always owned by someone who believes in this sort of contemporary capitalism,” he said.

As wariness mounts regarding the potential for artificial intelligence to disrupt people’s lives and livelihoods, Cucinelli said the young generation should remain optimistic regarding the technology’s potential. “This will be a very helpful tool. It does not show emotion, it doesn’t cry — it will help us to rediscover the value of human beings,” he said. As more and more repetitive work is replaced by artificial intelligence, “we’ll be more on the lookout for thinking human beings, thinking souls.”

“You have to greet the future with a smile,” he concluded.

Facing Climate Colonialism

What is “climate colonialism”? In the run-up to the UN’s COP 28 conference, the phrase fast-entering the sustainability lexicon refers to the way the countries in the Global South often suffer the most from climate change, despite having historically done little to contribute to the problem, while, in a fashion context, being hosts to the network of manufacturers being tasked with retooling supply chains to help address the crisis.

“A lot of the regulation is coming from the EU and the US without sitting down and talking to the communities that have the solutions, talking to the manufacturers and the workers,” Ayesha Barenblat, CEO of supply chain advocacy organisation Remake, said in a panel discussion with BoF’s chief sustainability correspondent Sarah Kent.

Suppliers further down fashion’s value chain — from materials farmers to fabric mills to manufacturers — operate in a highly competitive market with thin margins compared to brands, but are the ones who will need to invest the most to make fashion more sustainable.

“The companies that make the least amount of money on the top line and bottom line have to spend the most money because of how we distribute the responsibility,” said Vidhura Ralapanawe, executive vice president for innovation and sustainability at Epic Designers.  “We have to collectively fund decarbonisation,” he said.

Some see colonial dynamics at play at the end of fashion’s lifecycle, too, as poorer countries are forced to deal with the waste the industry produces. In Ghana, a glut of unwanted clothing exported from the West has choked landfills and often ends up washing into sewers, leading heaps of garments to wash up on shore.

Or Foundation founder Sammy Oteng held up a bag containing thousands of tags from just a few hours of cleaning up garments on the beach near Accra.

“Brands are in denial about what’s happening in Ghana. There is a lack of responsibility, because even if we ceased making clothing now, what happens for the decades of damage that’s already been done?” Oteng said. In countries like France, which export massive amounts of used garments, “people are so isolated they don’t ever see what’s going on. Even if you show them a video of what’s going on, maybe they’re shocked but afterwards they go back to their lives.”

Product Passports

One tool that could help hold brands responsible for what happens to their clothes once sold — as well as helping them monetise the secondary market — is the product passport, according to Arianee CEO Pierre-Nicolas Hurstel. “Until a significant part of a brand’s revenue comes from second-hand there’s no possible way to achieve circularity,” he said.

Product passports — which are now being rolled out at scale at many European luxury firms — will generate data about a product’s full life cycle. The technology could create ways for brands to connect with their second-hand customers and develop schemes to charge royalties on secondary-market sales, allowing them to continue funding advertising spend and infrastructure without creating more and more new product.

“This could truly change the revenue model and the cost model. We can change the way we do fashion,” Hurstel said.

Mathieu Blazy’s Creative Alchemy

During two years at the helm of Italian leather goods powerhouse Bottega Veneta, creative director Mathieu Blazy has developed a knack for “alchemy,” BoF’s editor-at-large Tim Blanks pointed out in a talk with the designer.

Creating surprising garments from inspirations as banal as an oxford shirt or jeans — using ultra-realistic trompe-l’œil effects to render those casual sportswear staples in printed leather, for example — has become one of Blazy’s signatures.

“I became obsessed with this idea of boring, universal clothes — thinking, how could we push that? How could we make something for everyday where only the person who wears it knows they are wearing something very special?” Blazy said.

Blazy has captivated fashion fans in recent seasons with shows that featured globe-trotting explorations of texture and craft, juxtaposing a variety of techniques and patterns. In fashion, less can be more, but Blazy has taken another approach. “I wanted to explore more and more. When you add a lot of characters, you add layers and stories and also emotions,” he said.

Textile design is a passion for Blazy, who said he’s increasingly focused on working with teams to make sure design elements are integrated into materials rather than embellishing garments. “There is nothing I love more than when I ask something of the team and they say it’s not possible: then I know it’s going to be a great adventure. That’s when I push and push.”

Young Africa

Lagos Fashion Week founder Omoyemi Akerele spoke with designers Michelle Adepoju and Iretidayo Zaccheaus in a panel spotlighting surging fashion creativity in Africa, particularly in Nigeria where a vibrant scene blends design with influences across cultures and disciplines.

“It’s a melting pot — there are so many young and hungry people in Nigeria, who are really hustlers. There’s so much passion,” Zacchaeus said.

Zacchaeus has attracted as many as 150 brands from across Africa to take part in recent editions of Street Souk, a roving platform for pop-ups, trade fairs and performances that “bridge the gap between the African streetwear community and the global community.”

Gap’s New CEO

Can the man who saved “Barbie” — taking the doll back from the brink of cultural irrelevance to a global marketing phenomenon — now save Gap Inc, another faded icon?

Richard Dickson, who masterminded a turnaround for Mattel and its signature toy, joined the retail giant with a mission to relaunch its troubled apparel brands, which were once front and centre in American culture and dominated the high street.

Like Barbie, “Gap is a pop culture brand that sells apparel,” Dickson told BoF’s Imran Amed, explaining how he was drawing inspiration from the brand’s roots as a destination for blue jeans and records in San Francisco, as well as iconic ad campaigns from the 1990s.

“Brands need to have a strong identity, a point of view and creative perspective. We don’t need everyone to like us,” he said. What that means for Gap remains unclear, but Dickson is examining how the brand can clarify and differentiate its message versus competitors, as well as clarifying the identity of sister labels Old Navy and Banana Republic.

“Every part of a brand needs to be communicated with precision, in stores and online as well as in the company culture,” Dickson said. “It’s never about changing the idea of a brand but translating it into a cultural conversation.”

How Culture Drives Performance

Tim Brown, chief innovation officer at shoemaker Allbirds, interviewed Owen Eastwood, a consultant who has worked to boost the performance of major sports teams as well as private companies by rebooting their cultures. “We found players were often in a chronic stress state, “Eastwood said. “Their experience was: ‘If this goes bad it could ruin my life.’”

Organisations looking to inspire and motivate through means other than fear and stress need participants to foster a sense of belonging.

“[Players] need to connect as individuals to something bigger than themselves,” he explained. “You create a story for them to connect to, and then you need to refresh and retell that story continuously.”

BoF VOICES 2023 is made possible in part by our partners Snapchat, McKinsey & Company, Porsche, Getty Images, Invisible Collection and Soho House.