The Destiny of Returned Merchandise at Retail Stores

Returning items is a common practice in retail, but what happens to these returned goods? The fate of returned merchandise can vary widely depending on the retailer's policies and the condition of the items. Let's explore some of the common destinations for returned goods and the processes involved.

Restocking: Reselling New Items

For items that are in perfect condition, many retailers choose to restock them directly onto store shelves or sell them online. This is often the ideal scenario for both the retailer and the consumer, as it allows the returned goods to be resold without any further processing. Items that are repacked and deemed suitable for resale are often resold as new stock, helping to reduce costs and improve the efficiency of the supply chain.

Discounting: Marking Down for Clearance

If an item is in good condition but cannot be resold at the full retail price, it may be marked down and sold as a clearance item. These items are usually offered at a discount to clear out old or discontinued stock. This is a common practice during sales events or seasonal clearance periods, where retailers offer significant discounts to encourage customers to purchase these items quickly.

Liquidation: Selling to Third-Party Companies

For items that cannot be repacked and resold, some retailers opt to sell them to liquidation companies. These companies then resell the items at a discount, often at bulk prices. This can be a mutually beneficial relationship, as liquidation companies can quickly offload large quantities of returned items, while retailers can recoup some of their costs.

Donations: Giving Back to the Community

Some retailers choose to donate returned goods to charities or organizations in need. Items that are still in good condition and can be resold are often used to support local communities or help those in need. This not only helps to reduce waste but also contributes to social responsibility initiatives.

Recycling or Disposal: The Final Destination

In cases where items are damaged or unsellable, they may be sent to recycling facilities or disposed of as waste. This is often the last resort, as it involves environmentally unfriendly practices. However, it is crucial for retailers to ensure that they handle waste responsibly and in compliance with local regulations.

Major Retailer Return Process: A Closer Look

For major retailers, the return process can be quite complex. Let's explore an example of a major clothing retailer's return system. When a customer returns an item, the employee will set a credit to the account or refund the purchase if the item is unopened. If the item is opened but does not have major or noticeable stains or tears, a potential credit is issued, and it is sent to the warehouse.

At the warehouse, a team of around 30 to 40 employees go through large bins of returned items each day. Each item is assigned a unique 20-digit number for tracking. Items are then inspected for any damages or issues. If the item is deemed suitable for resale, it is marked as good to return to the shelves. Items requiring further action are split into categories based on the extent of the damage, from minor repairs to external repair shops or back to the vendor for repair/replacement.

Suitable return items that are still in style or season are sent back to the main warehouse shelves for resale online or to store locations. Items that are out of style are listed in the outlet or overstock sections, often packed with unsold units of the same item, to be sold at a lower price.

In conclusion, the journey of returned goods from commercial stores to their final destination is a multifaceted process that prioritizes sustainability, cost-effectiveness, and social responsibility. Retailers play a vital role in managing returned items efficiently and responsibly, contributing to the overall health of the retail ecosystem.