The seat belt retraction system works on the 'inertial tension' created by a coiled spring mechanism - much the same way a a retracting tape measure works. When you pull the belt webbing out, the spool rotates counter-clockwise, which turns the attached spring in the same direction. Effectively, the rotating spool works to untwist the spring. The spring wants to return to its original shape, so it resists this twisting motion. If you release the webbing, the spring will tighten up, rotating the spool clockwise until there is no more slack in the belt. If debris has caught in the 'sping' or any part of the mechanism this may cause it to fail - you can pull the belt out but the retration mechanism will not allow it to return. You can try parking on a level surface (which allows and internal weighted pendulum in the mechanism to sit in the unlocked position) and quick tugs at the belt may shift any debris causing the mechanism to jam. If the belt still fails to retract then the problem is probably in the mechanism itself - some larger piece of debris causing the mechanism to seize or a broken mechanism. I have attempted to repair a mechanism on a Mini - but there are no individual spare parts available and it was cheaper to buy a new belt and mechanism, same for the Zed I would imagine. As the seat belt is an integral part of the safety sytems for your passenger then I would suggest a new unit is the best option. In the UK it's a vehicle test failure point. In this case the 'doctor' probably knows best!
http://www.realoem.com/bmw/showparts.do?model=BU32&mospid=49302&btnr=72_0437&hg=72&fg=05