I recently read an article on the CBC website (“Hidden cameras and secret trackers reveal where Amazon return end up”) about what Amazon does with some returned products when people return them in new condition. Apparently many of these products end up in landfills. The article notes that this waste caused France, for example, to pass a new French anti-waste law forcing e-retailors like Amazon to “recycle or donate all returned or unused merchandise”.
Destroying new merchandise is a horrible waste, but we shouldn’t put all the blame on Amazon, there is more than enough of that blame that we can assess against ourselves. Americans have long had a love affair with returning items. How many of us have done the following:
- Purchased clothing for a special event and then returned the item the next day for a full refund?
- Purchased multiple colors of an item to determine which color we liked best and then returned the rest?
- Ordered multiple sizes of an item to determine the best fit and then returned the rest?
- Purchased something because it was on sale only to later return it because you really couldn’t use it?
We are more likely to indulge in the above non-efficient behavior when there is no cost to us. Businesses offer free returns to gain a strategic advantage over their competition and to provide exceptional service to their customers. In many cases Amazon and other vendors will not only allow free returns but they will also provide you with a shipping label so you don’t incur any upfront shipping costs to return the item. You re-box the item, attach the return mailing label, and drop if off. Easy-peasy!
Yahoo Finance states that “It’s not uncommon for online retailers to see 30% of all products people ordered online returned, as compared to 8.89% in brick-and-mortar stores. Clothing return rates can be close to 40%”.
Sometimes these returned goods are resold by the vendor as “used” or sold to liquidators who resell the items at a discount. But, in many cases, the returned produces are thrown away. Often it is more cost-effective for a vendor to trash a new product rather than have it returned to their facility as the return cost exceeds the vendor’s profit margin on the product. Has anyone ever received the wrong product and were told by the vendor to keep the product and they would mail the correct product? This happens because in some cases it’s not worth it to the vendor to pay for the cost to have the wrong product shipped back.
When I sell my personal books online I have a free return policy because most book wholesalers won’t accept books unless there is a free return policy. But, I specify that the returned book be trashed so I don’t have to pay the return shipment costs which are higher than the cost to produce my book!
The product waste incurred when good products are trashed has a big economic impact which can be larger than the production cost of that item. The shipping and labor costs of these returns are significant and steals person-hours away from “value-added” work.
We are a return society. Americans enjoy their freedom and that freedom extends to returning items with little concern for the economic impact.
We have seen the enemy and it is us!