- Getty/Kena Betancur
- An estimated $90 billion in holiday merchandise is about to be returned to stores.
- Much of that is no longer salable and will be thrown in the trash.
- The rise of online shopping further complicates returns.
Every headline of a happy holiday result comes with a flip side: concerns about returns.
Returns make up the bulk of every retailer’s holiday hangover. An estimated $90 billion worth of unwanted items will be sent back to retailers, according to CNBC, which cited Optoro, a tech firm that helps retailers organize and manage their returned goods.
Making matters worse, only half of returned goods make it back to shelves immediately. The next quarter is given back to the manufacturer. The rest, most likely because they arrived in opened or damaged boxes, are sold to various third parties like discount retailers or liquidators.
In many instances, it’s cheaper for the retailer to just chuck the unwanted item in the trash, rather than process a return. An estimated five million pounds of trash are generated from returned items every year, according to Optoro, as cited by CNN Money.
In many cases, retailers are swallowing the brunt of this cost, except in the case of online returns. When returns are sent back to online-only companies like Amazon, freight costs are usually borne by the customer. The item then goes through the same cycle as any other returned merchandise would.