Asos Introduces a Return Fee for Customers With High Return Frequencies

Asos Introduces Return Fee: Key Insights

• Discouraging Frequent Returns in eCommerce: Asos recently sent an email to selected customers informing them that they have been identified as frequent returners. This means that for future purchases from Asos, a £3.95 fee will be deducted from their refund, provided they keep less than £40 worth of items. The limit is lower for Asos Premier members.

• Market Circumstances Put Pressure on Retailers: The dynamics of the global fashion market benefit brands that offer lower prices and faster turnaround, and new entrants are outperforming stores like asos.com in that regard.

Asos is introducing a return fee for some customers who have been identified as frequent returners. The £3.95 fee (US$5.2) angers Internet users who lament the days when you could order a US$5 item from Asos with free shipping and no return surcharges. 

But times have indeed changed. Physical retail is competing with online platforms, and other low-cost sites like Temu and Shein are undercutting fast-fashion retailers on price while outperforming them on the volume of collections they offer. 

However, not everyone is equally affected by the rate, as Asos is only targeting those users who are known to return their orders more frequently than others. Here is what it is all about.

The Issue: Asos Discourages Frequent Returns

Some Asos customers in the UK have recently received an email from the company informing them that their past return habits have earned them the status of frequent returners. This means that for future purchases from Asos, a £3.95 fee will be deducted from their refund, provided they keep less than £40 worth of items. 

In a statement to the BBC, Asos did not specify the criteria used to identify high returners, but assured the BBC that most customers would not be affected by the change. Asos Premier subscribers are in an advantageous position as their threshold drops to £15.

Why the Change?

It is clear that Asos is responding to the dynamics of a highly competitive field, the global fashion market. Online fashion is being disrupted by changes in production processes, most specifically the C2M model. On top of that, emerging competitors with extensive capital backing like Temu are driving an unsustainable strategy of making losses on every order to gain recognition and compete more effectively. 

But this is taking market share away from retailers like Asos, who have built customer loyalty through competitive pricing and frequent style changes. Our proprietary ECDB data shows how net sales at asos.com soared during the pandemic, but declined in the years after. Despite this most recent decline, net sales remain above pre-pandemic levels.

The net sales trend underlines what asos.com is trying to achieve with the fee increases: To reduce redundant costs and remain stable amidst the changing dynamics of global fashion. Whether the fee increases will deter customers from ordering too many items they don't intend to keep, or from ordering from asos.com at all, is unclear.

Sources: BBC – Locate2u