H&M Participates in Global Recycling Scheme
"We want to do good for the environment, which is why we are now offering our customers... to leave their worn out or defective garments with H&M," chief executive Karl-Johan Persson said in a statement.
Together with Spain's Zara, the Swedish brand was one of the first to copy the latest catwalk trends and then sell them for a fraction of the price.
However, the company has come under fire for fuelling an unsustainable, throwaway fashion culture and has sought to improve its image this year by marketing itself as a major buyer of organic cotton.
The new recycling initiative will be rolled out across the chain's 48 markets in February next year, in 1,500 of its 2,700 stores, including all outlets in the UK, US and Japan.
Customers will be given a voucher for each bag of used clothing handed in.
A spokeswoman for the company, Anna Eriksson, said a pilot project in Switzerland last year had been successful, and that it had "increased customers' awareness of our work on sustainability."
The costs incurred by the company from transporting the used garments to recycling plants will be limited, since it already has spare capacity on the delivery routes between stores and warehouses.
"Long-term, H&M wants to reduce the environmental impact of garments throughout the life-cycle and create a closed loop for textile fibres," the company said.