The Way Forward in Fashion e‐Commerce Returns: Enhancing Eco‐Efficiency

In fashion e-commerce, about one in three orders is returned; however, firms keep offering free, fast returns driving these volumes even as they acknowledge the economic and environmental costs. Why do inefficient return practices persist? We argue that the answer is not a failure to optimize but a collective trap in which no single actor can afford to break away alone. Adopting a supply chain perspective and drawing on Extended Institutional Theory (EIT), through a qualitative multiple-case study of Italian fashion e-commerce firms, we examine how the interaction of legitimacy-seeking and profit-seeking logics across producers, retailers, and logistics and transport providers reproduces these practices. Upstream legitimacy-driven decisions, aimed at maintaining high service levels, propagate downstream through contractual-operational constraints, limiting the autonomy of logistics and transport providers. These interdependencies generate reinforcing decision-making loops stabilizing dominant return practices, notwithstanding their inefficiencies. The study identifies outcome-based imitation mechanisms, such as omnichannel return management, return consolidation, and differentiated return policies, as levers to disrupt these loops and enhance eco-efficiency while maintaining legitimacy. The paper extends EIT to supply chain contexts and offers prescriptive insights. Practically, it highlights the need for sector-based actions to rebalance legitimacy and profit motives for sustainable returns management.