What’s really going on with them?

Sending an online order has never been easier. It is often free for the customer, with some retailers even allowing customers to keep the item while offering full refunds.

Amazon returns can be dropped off at Kohl’s, UPS or Whole Foods without packing it up or even printing a label.

But there is a darker side to the record-breaking number of returns flooding department stores after the holidays.

“From all these returns, almost 6 billion pounds of landfill waste are now generated per year and 16 million tonnes of carbon dioxide emissions as well,” said Tobin Moore, CEO of the Optoro return solutions provider. “That’s the equivalent of the waste produced by 3.3 million Americans in a year.”

Moore says online purchases are at least three times more likely to be returned than items purchased at a store. In 2021, a record $ 761 billion worth of goods were returned, according to estimates in a new report from the National Retail Federation.

The report says 10.3% of those returns were fraudulent. Meanwhile, Amazon’s third-party sellers told CNBC that they end up throwing about a third away of returned goods.

“Someone has to pay for it,” said Micah Clausen, who sells party supplies and home goods on Amazon under a third-party store called Iconikal. “It falls back on either Amazon or the third-party seller. It comes out of their bottom line and inevitably causes prices to go higher.”

UPS predicts that the holiday season in 2021 will see a 10% increase in returns compared to the previous period, which will result in more waste – and expenses – for all online retailers.

At the head of the herd, Amazon has received increasing criticism over the destruction of millions of items. Now the e-commerce giant says it is “working towards a goal of zero product disposal.” Last year, it launched new programs to give sellers like Clausen new opportunities to resell returns or send them up for auction in the liquidation market.

Liquidity Services Consumer Marketing Manager Meredith Diggs explains a way in which e-commerce has normalized purchasing habits leading to more returns.

“Wardrobe [is] “where people will order the same thing in three different sizes to see which one fits, and then they return the other two without realizing that the other two mostly do not go back on that dealer’s shelves,” Diggs said.

“Categories like clothing see really, really high returns in the 10s of percent,” added Raunak Nirmal, who used to work at Amazon and now runs an Amazon aggregator, Acquco, with more than 40 third-party brands. His return is closer to 3%.

“If it’s a new product, Amazon will allow the product to be resold on the list as new, but it really needs to be in pristine condition for that to happen, and it’s more rare than you would expect, even if the customer does not. have used it. used the product at all, “said Nirmal.

When an item cannot be sold as new, Amazon gives the seller up to four options for what to do with returns: each with a fee: Return to seller, disposal, liquidation or (by invitation only so far) fulfillment of Amazon Rate and resell.

With Back to seller option leaves the return Amazon’s warehouse for multiple legs on a truck, aircraft or cargo ship. It goes back to the seller for further processing, then it can go to another Amazon warehouse for sorting and repackaging, then on to a new customer who could always choose to return the item again.

“You’re basically forced to decide if you want to recall the inventory to your warehouse – which is an expensive process – repackage it yourself and then send it back to a warehouse to sell, which does not make sense, I would say “80% to 90% of the time. Or you can choose to dispose of it,” Nirmal said.

Disposal is an all too common fate for returns from many of the major online retailers. In a statement, Amazon told CNBC: “No goods are sent to landfill. We are working towards a goal of zero product disposal and our priority is to resell, donate to charities or recycle unsold products. As a last resort we will ship goods for energy recovery, but we are working hard to drive the number of times it happens down to zero. “

“Energy recovery” often means it is incinerated. In the words of the U.S. Environmental Protection Agency, it is “the conversion of non-recyclable waste materials into usable heat, electricity, or fuel through a variety of processes, including incineration, gasification, pyrolysis, anaerobic decomposition, and landfill gas recycling.”

“What really shocked me honestly were the things that the computer system tells you to destroy,” said Shay Machen, a seasonal worker at an Amazon return center in Mississippi. “I got a book back, it was a children’s book, and the customer said it was smashed on arrival and bent over, and it was not. And no matter what I put into the system, it was there to destroy the item. And that was something heartbreaking. “

Disposal of return goods is a widespread practice in e-commerce. Luxury retail brands such as Burberry have previously been criticized for burning millions of unsold items to protect their brands, a practice Burberry told CNBC that it stopped in 2018. A Danish TV station reported that H&M had burned 60 tons of new and unsold clothing. since 2013. claims that H&M told CNBC was a misunderstanding. An H&M spokesman said: “The products the media referred to had been affected by mold or did not comply with our chemical restrictions.” Similar allegations have hit Coach, Urban Outfitters, Michael Kors, Victoria’s Secret and JC Penney.

“It’s the easiest thing to do, and sometimes certain brands do it because you know they want to protect their brand and they don’t want less valued items out there on the market,” Moore said.

Some brands, like Nike, have found creative ways to upgrade returned items, turning them into new valuables.

“Some of the shoes they can not sell may end up being sanded and turned into rails,” Moore said. “It takes energy to grind and transform goods into other things. I think first and foremost, if you can sell it in its original form, that’s the best case scenario for the environment.”

Amazon has a number of programs designed to do just that. For certain electronics products like Amazon devices, phones and video games, it allows customers to send them to a certified recycler or exchange them with Amazon gift cards. And since 2019, its FBA Donation program has allowed salespeople to automatically offer qualified overlays and return to charity groups through a nonprofit network called Good360. Amazon says more than 67 million items have been donated so far.

Amazon also announced two new re-homing programs last year after the British TV station ITV reported that the company destroyed millions of items such as TVs, laptops, drones and hair dryers in a UK warehouse.

First, there is Liquidation, which Amazon now offers sellers as an option instead of disposal.

Amazon and other major retailers partner with liquidation marketplaces such as Liquidity Services and B-Stock Solutions, which auction off unwanted inventory to dealers by pallet or even truck.

“You can recoup about 5% of your sales price if your product can be liquidated,” Nirmal said. “And in the end, it ends up in the hands of someone who can hopefully use it.

YouTube creators like Hope Allen have built a fan base from finding online deals, and liquidation pallets have become a popular trend. Last year, she paid $ 575 for a pallet of Amazon returns on Liquidation.com that was reportedly worth nearly $ 10,000, and unpacked it on her channel where she goes by HopeScope.

“There were definitely some items on the pallet that were clean waste. But then there were other items like a UGG coat or like some nicely heated winter gear that I really like? They did not think it was worth rebuilding? It here’s a coat for $ 300, “said Allen.

“For one of our clients once, I think we auctioned something in the direction of 42 truckloads of floor tiles in one lot,” said B-Stock Solutions founder and CEO Howard Rosenberg. “We have sold lots of cell phones that have been north of a million dollars at a single auction.”

Liquidations can go to retailers, who then deliver items at flea markets or on sites like Craigslist and eBay. Allen sells the items she does not have at Poshmark, or donates them.

“It’s like a fancy version of dumpster diving, but a little more promising, safer and more legal,” Allen said.

Amazon is offering some sellers another option, but it’s only by invitation until later this year.

Below FBA grade and resale program, gives Amazon items a rating like New, Very Good, Good or Acceptable, and then resells it on specific sections of its site. These sections include stock quotes for second-hand items, Amazon Renewed for refurbished items, Amazon Outlet for overlays and a daily quote site called Woot! who sells a $ 10 “Bag of Crap” and describes himself as “a wild outpost on the fringes of the Amazon community.”

Watch the video to learn more about where online returns really end.

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Sending an online order has never been easier. It is often free for the customer, with some retailers even allowing customers to keep the item while offering full refunds. Amazon returns can be dropped off at Kohl’s, UPS or Whole Foods without packing it up or even printing a label. But there is a darker…

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