What happens to retail returns?

In 2015, retail returns reached $290 billion in the U.S. and Canada, accounting for 8 percent of total retail sales. Companies face challenges such as constantly changing demand, costly warehousing and transportation expenses, as well as the need for a quick turnaround time to recover profit from returned goods.1

Time is the biggest key factor in determining the recoverable value of returned goods. Retailers must process, sort and send items to final disposition as quickly and cost-effectively as possible. Here are some of the ways retail returns are processed.

  • Return to stock: Returned items in new or like-new condition can be put back on shelves or used for e-commerce fulfillment for full value.2
  • Return to vendor: We process returned items that didn’t meet customer requirements due to flaws or damage.
  • Liquidate in secondary markets: Due to costs, these returned items are collected and sold in bulk below retail value to liquidation and outlet stores.
  • Recycle, donate or destroy: When necessary, we recycle, donate or dispose of items — either in whole or in part — using regulatory-compliant and environmentally friendly procedures.

Download the graphic to see how the process works.

1 David Egan, Americas Head of Industrial Research, “Swimming upstream: navigating the work of reverse logistics” (CBRE Research), March 3, 2016.
2 Brian J. Gibson, C. Clifford Defee, Rafay Ishfaq, “The State of the Retail Supply Chain: Essential Findings of the Fifth Annual Report” (Retail Industry Leaders Association), March 10, 2015.

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