In this insightful discussion, Amanda Mull, a staff writer at The Atlantic and expert on reverse logistics, dives into the fascinating world of retail returns. She sheds light on the complex journey of a returned item, revealing the often humorous yet challenging processes at return warehouses. Amanda explores the donation dilemma, highlighting how many goods end up in landfills. She also discusses evolving retail return policies and their impacts on sustainability, consumer behavior, and the modern shopping experience.
The process of handling returns involves a vast network of infrastructure and resellers, contributing to the growth of the reverse logistics industry.
To discourage excessive returns, retailers are starting to impose fees on return shipments, but consumer behavior remains unchanged and return rates remain high.
Deep dives
The Complex System of Returns Processing
The process of handling returns involves a vast network of infrastructure, transporters, warehouses, and resellers to accommodate the hundreds of millions of products that consumers send back. Inmar Intelligence is one such company that handles returned items for retailers. Inside their facility in Pennsylvania, material handler Michael sniffs sweatpants as part of his job. The large-scale facility, spanning 300,000 square feet, stores and processes various types of returns, including drugstore items, rugs, and apparel. Bracketing, the practice of buying multiple sizes of clothing or rugs and returning the unwanted items, is common. The high return rates in online shopping have contributed to the growth of the reverse logistics industry.
The Life Cycle of Returned Items
Returned items that are deemed pristine and still in season may be sent back to the retailer for resale. However, many returned items, including rugs and clothing, are sold in bulk to liquidators like TJ Maxx or wholesalers who deal with overstocks. If the items are not cost-effective for the retailer to take back or are close to the end of their product cycle, they may be designated for liquidation. Some items are donated on a large scale, but it is difficult to track what happens to them afterwards. A significant percentage, about 15%, is disposed of in various ways. Destruction of items typically occurs in separate facilities.
Challenges and Future Trends in Reverse Logistics
Retailers face challenges in managing the growing volume of returns and the associated waste. To discourage excessive returns, retailers are starting to impose fees on return shipments, even including online giant Amazon. However, consumer behavior has not significantly changed, and the return rates remain high. While incentives and fees may guide consumer behavior in the future, reversing these habits may be challenging. The convenience and perception of online shopping have reshaped consumer preferences, making it difficult to return to in-person shopping. As a result, the reverse logistics industry, including workers like Michael, will likely continue to have work in the foreseeable future.
Your aunt mailed you a sweater for Christmas that’s three sizes too small. Armed with a gift receipt, you set out to return it. The Atlantic’s Amanda Mull enters the returniverse to find out what happens next.
This episode was produced by Amanda Lewellyn, edited by Amina Al-Sadi, fact-checked by Laura Bullard, engineered by David Herman and Rob Byers, and hosted by Sean Rameswaram.