Over a century ago, JC Penney was a pioneer in introducing the concept of no-questions-asked returns. However, as David Owen highlights in his article in the New Yorker, the return rate was only around 2% at that time. In today’s era of online shopping, the return rate has skyrocketed to approximately 20%, and it is even higher for clothing items. Handling returns has become a business in itself, and Owen provides an in-depth analysis of this phenomenon. Surprisingly, during the winter holiday season, returns in the US alone reach a staggering $300 billion, equivalent to 1.5% of the country’s GDP. Annually, the value of returned items is nearly $1 trillion. Owen unravels the fate of these returned goods, giving tangible examples of what happens to them.
Very few returned items are repackaged and sold as new. Instead, a whole industry has emerged to deal with returned items, with companies like the Reverse Logistics Association buying them at significantly reduced prices and reselling them to small retailers. Alternatively, the items may be shredded for their metal or plastic components, or attempts may be made to refurbish damaged items. For example, pressure washers often get returned because users fail to read and follow the instructions, leading to motor damage. Refurbished items may find their way to discount stores like Ollie’s. If you’re interested in becoming a buyer of bulk returned items, you can register with Liquidity Services. Owen’s full article delves into all aspects of this process, shedding light on our throwaway culture and providing options for further reading.
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