Solving the Returns Disposal Equation

It’s probably fair to say most customers don’t give too much thought to what happens to a faulty or unneeded product when they return it to the retailer for a refund or replacement. However, the responsible processing and, where necessary, disposal of returned items is becoming an increasingly serious concern for the retailers themselves.

Many items are simply not appropriate for resale once they are returned, usually for reasons of hygiene, and must be recycled or disposed of. This is particularly true in the fashion retail business where certain products, particularly undergarments, cannot be resold for the reasons detailed above. The disposal of clothing items is the number one reason for the fashion industry’s status as a major pollution contributor.

Brands therefore need to come up with innovative strategies to properly dispose of returned items not fit for resale in order to avoid the environmental and reputational harm which comes with not doing so.

A Growing Concern

When looking into the returns disposal issue an investigation was carried out by CBC Marketplace and the Basel Action Network. The methodology of the research involved purchasing 12 random Amazon products and then returned each one for a refund. Each returned product was secretly fitted with a GPS tracking device, so it’s journey back through Amazon’s returns procedure could be followed.

The study concluded that, of the 12 items returned, only four were resold to other customers. The remaining eight where either gathering dust in Amazon warehouses, in a landfill, or awaiting dissolution in a product destruction facility.

While twelve products represent a relatively small sample size, the findings were backed up by an ITV News report which infiltrated an Amazon warehouse and discovered shelves of boxes filled with a combination of returns and unsold items labelled for destruction. A former Amazon employee confirmed the retail giant had a target to destroy 130,000 products each week.

"Undercover filming from inside Amazon's Dunfermline warehouse reveals the sheer scale of the waste," reported ITV News. "Smart TVs, laptops, drones, hairdryers, top of the range headphones, computer drives, books galore, thousands of sealed face masks – all sorted into boxes marked "destroy." Almost all could have been redistributed to charities or those in need. Instead, they are thrown into vast bins, carried away by lorries (which we tracked), and dumped at either recycling centers or, worse, a landfill site."

Clearly this isn’t an issue which is exclusive to Amazon, but as the world’s largest retailer it will obviously be where the problem of returns disposal is most pronounced. In fact, Amazon’s own generous returns policies have forced many other retailers to offer similar terms, which in turn has driven the returns culture which is largely responsible for the issue of disposal.

Solving the Equation

Retailers need to find ways of combatting this culture of returns disposal. A brand the size of Amazon may have the power to swallow bad press, but similar reports could easily mean the end of a smaller company.

Products should always be put up for resale whenever possible and legal to do so. Where products cannot be resold, other options should be explored such as whether they can be donated to charitable organization to be redistributed to those who may need them or broken down for spare parts and/or recycling.

Companies in the retail space should also be doing everything they can to dissuade this frivolous returns culture we’ve created. Overly generous returns policies have fueled fraudulent practices such as wardrobing – purchasing an item, using it a single time, then returning it – and bracketing – purchasing multiple colors/sizes/etc. and only keeping the best one – and need to be addressed, if the problem is to be lessened.

Platforms such as Optoro also exist to help retailers better deal with returned stock and offer multiple channels through which to properly resell or dispose of unwanted items.

"Optoro believes it has a viable solution," says BBC News. "Its software helps retailers and manufacturers resell unsold and excess items more easily. They offer a multitude of options for retailers, including a website to re-sell their goods, called Blinq, as well as helping with re-routing items to donation, store shelves, Amazon, or eBay. They estimate their work helps reduce landfill waste by 70%."

Final Thoughts

Retailers need to find methods of dealing with returned items in a responsible manner while simultaneously working to dissuade the returns culture rod we’ve made for our own backs. The planet and our reputations depend on it.

Returns disposal is certain to be part of the conversation at Consumer Returns 2022, taking place in October at the Hyatt Regency Austin, TX.

Download the agenda today for more information and insights.