Unsold and Returned Goods
Ever walk behind a retail store and notice stuff in the dumpster that’s still in the original packages? Or return an item with a small flaw and wonder what the store is really going to do with it? Or look at all the truly ugly clothes on the sale rack and speculate about what the store does with the stuff they can’t sell? There’s a lot of potential for behind-the-scenes waste from returned and unsold goods.
How big of an issue is this? I couldn’t find Canadian figures, but in the U.S., the retail return rate for 2023 was 10 percent for in-store purchases and 26.4 percent for online sales. Think about that for a sec -- more than one in every four online purchases is sent back. In 2023, U.S. consumers returned $248 billion in merchandise from online sales and $373 billion from in-store sales. “Most online shoppers assume that items they return go back into regular inventory, to be sold again at full price. That rarely happens.” [The New Yorker, Aug 2023]
Many of these returned goods—clothing, electronics, furniture, and more—are still new or need minor repair. While some retailers work to give these items additional lives, much of it ends up in landfills. Some even direct employees to destroy goods before they’re thrown away. Why does this happen? Retailers often cite logistical challenges, financial losses, and brand reputation concerns as reasons for resorting to destruction.
The manufacturing process for these goods requires substantial resources—water, energy, raw materials—contributing to greenhouse gas emissions and environmental degradation. When these items are discarded, all those resources are wasted.
A key principle of the Circular Economy is that we need to keep products in circulation at their highest and best use for as long as we can. This is NOT what’s happening here. That doesn't mean that nothing is changing. Some of the larger retailers are working on it. This 2019 CNBC video chronicles different approaches to tackling the issue.
And us, here, now? What can we do?
As consumers, our role is pretty clear: consider purchases carefully, don’t buy stuff you don’t need, and DON’T buy stuff without a plan that you end up returning later. By all means, return the items that fail to perform as expected/advertised.
It’s time for more sunlight on this issue. Ask your retailers what happens to returned and unsold goods. Retailers – you need to openly acknowledge your current practices with returned and unsold goods and find better solutions. Bring it out in the open – what are the issues? What do you need help with? How can consumers/charities/entrepreneurs be part of the solution?
Governments – are you helping or hindering? Do you encourage reuse? Give any tax breaks to used goods sellers and repairers? One policy that needs to be revisited is the Federal Duty Drawback– you can get a break on your next import duties if you prove that unsold items from a previous import have been destroyed. There’s something wrong with a system that rewards people for destroying value. There has to be a better way.
So, think on it everyone… keeping materials at their highest and best use and in circulation as long as possible … that means all goods, even the returned and unsold ones.