Remember that game, “Would You Rather?”

Well, here’s a great dilemma you might want to consider:

If you had to pay $200 out of pocket, would you be in such a hurry to spend it on buying a $50 skirt?

Or how about this scenario: Would you waste time and energy running backwards and forwards ordering and returning excessive purchases to the post office just for the fun of it?

Assuming your answer is “no,” then we’d like to educate you on the topic of Serial Returning.

Hi, I’m Annette Dahan, the fashion designer and driver behind Esteez, with my husband and partner Dov, the business brain behind our company.

Ten years ago, in 2014, we first launched our e-commerce business Esteez and our website, progressing on to Amazon in 2016. Between my husband and myself, we’ve got over thirty-five years experience in the clothing business.

Returns were originally tolerable, predictably around 15%. But then Amazon started offering free shipping and returns and that’s when things started spiraling out of control for all third-party partners (3P). What that meant to us and all the other vendors using Amazon as our seller was that Amazon was encouraging shoppers to buy multiple items because they were making money on all the purchases and  returns. However, as a company that sells our own name-brand products directly to consumers on Amazon’s marketplace, we started feeling the crunch. 

Returns have now doubled in our business, and the part that hurts the most is that they are mostly intentional returns. Going back to our initial example of the $50 skirt that cost $200, would you pay that cost? You would not if the $200 was coming out of your own pocket and was spent on ordering four different sized $50 skirts, three of which you weren’t planning on keeping anyway. But let’s say you could swipe the credit card, order the four $50 skirts with free shipping, then return them for free and just keep the one you wanted, or worse yet—return them all! This of course would be done with the click of a finger all from the comfort of your sofa at home.

Customers need to know that on that $200 “purchase” of those four $50 skirts, between the various fees Amazon charges per item, we lose money. This is not just about Esteez. This is about small- and medium-sized e-commerce companies that either will not survive or will be forced to charge exorbitant prices in order to compensate for the losses that we incur from the abuse that we in the industry call SERIAL RETURNERS.

Why would Amazon choose to torpedo its bread-and-butter vendors? Amazon is only interested in one company, and that is Amazon. It has a myriad of vendors, sellers, and global power. Its third-party partners are not exactly on its “things-to-worry-about” list. 

In order to understand Amazon, you need to understand the psychology behind e-commerce.

Here’s how it plays out: Amazon charges a referral fee and a picking and packaging fee on each item shipped. If an item is returned, these charges are non refundable to third-party partners companies like us. Only the commission that they make on the sold product is refunded to us. 

Amazon has taken advantage of the “pain of paying” behavior of humans and used it to their advantage. People have a hard time spending money; it always inflicts pain. Based on that, Amazon realized the more “free” you can get to offset the pain inflicted by shopping, the easier it is to push their e-commerce consumer to take that last leap of faith and buy. So started the wonderful world of free shipping, free returns, and fast shipping, and let’s not talk about refunds without the returns!

These expectations and efforts to lessen the pain of paying have made people, on the whole, more irrational and wasteful consumers. When customers buy because of a perceived no-cost service, the loss of fiscal responsibility intensifies at every step of the supply chain. They feel in control of the narrative and can do whatever they want, since they won’t even feel that swipe of the credit card because it won’t have been charged by the time they return the merchandise at their local UPS drop-off! So it’s a win-win for Amazon and the consumer, with only the 3P vendor losing his pants, literally.

Now that you have the hard financial facts, consider additional problems, too. Imagine a small ladies clothing business that has recently opened online. They have manufactured eighty-four dresses in one particular style. Ten different consumers have intentionally ordered six dresses for themselves in every size and color available, intending to return them. That’s most of the stock out!  Or consider a frum business running a sale. If every color and style is ordered with no intention of actual purchasing, that entrepreneur has lost a lot of business to serious customers who wanted to take advantage of the sale.

This type of locking up stock and causing financial losses to our communal e-commerce businesses causes prices to skyrocket (to balance out the loss) and small businesses to seriously consider filing bankruptcy or to stop selling online. This is almost likened to the sins of stealing and not encroaching on your neighbor’s business. It is our job to protect each other. Yes, support Jewish industry, but make sure it’s supporting and not bankrupting.

That was why we felt it was incumbent upon us, as seasoned vendors, to bring to the Jewish population’s attention the abuse and the pinch that is being felt by all 3P vendors, especially within our community. We have ample opportunities to chat with fashion designers and entrepreneurs who have complained bitterly about this problem. Many of them have left Amazon, leaving a huge void in our online niche market.

On an ideological note, it also hurts tremendously because I know that I opened up this business with the best of intentions. I wanted clothing that was affordable, trendy, and modest for myself and my four daughters, yet the prices were astronomical. I knew I could do better than that, and I proved to myself and others it was possible. 

All this talk brings out the obvious question: why do we sell online then? Selling on our website is great, but we’re channeling only into the very small niche of frum, tznius-dressing women. Retailing on Amazon opens a whole world of traffic for Esteez to be sold to the masses. You might be surprised to discover that 40% of our clothes are sold to Jewish consumers while the remaining 60% are actually sold to various women from other religions that appreciate modest dress. This also includes the office skirts that are worn as professional attire for the accomplished woman looking for that polished look. Dressing in modest skirts and dresses is the latest trend, making Esteez clothing a perfect choice across the board.

As women, let’s be honest, we love shopping.  Who doesn’t use retail therapy to cheer themselves up and joke about shopaholics?  At least going to a physical store means paying for the merchandise, and even if you return some, there are no repercussions to the retailer.

Statistics show that people window-shop more in a bad economy than a healthy one. In the past, window-shopping meant looking at the store’s merchandise, wishing we could afford to buy to our heart’s desire. Today, though, with a swipe of a card, window-shopping is new and improved. We get to experience the luxury of owning our previously unattainable dream even if it’s only ours until we return it.

At the end of the day though, troubles with Amazon or  disappointments through serial returners will never affect my pleasure knowing Esteez is being loved and worn the world over. From my very first sighting until the present day, I get the same adrenaline and feel-good rush seeing Esteez pieces on women and girls of all stages and phases. I could be in Florida, or New York, and I’ll nudge my husband and whisper, “See that lady over there? She’s wearing one of ours!”