Xmas_Returns

The Unwanted Economics of Christmas Returns

Only half the stuff we take back to the store goes back on the shelves

Every year, millions of Americans open a present they wish they hadn’t, and soon enough, they’ll be flocking back to stores and shopping malls across the land to try and get a refund, an exchange or a credit. So how much of a pain in the ass is it for stores to take back the things you and everyone else didn’t want to receive for Christmas? And what happens to it all? Let’s exchange our questions for some answers.

How many Christmas gifts are returned every year, anyway?

As you can imagine in this depraved, hyper-capitalist, billionaire-bootlicking society of ours, this holy holiday of consumerism generates a lot of unwanted shit. In fact, it’s estimated that two-thirds of shoppers will make a return this holiday season. In $692 billion of holiday sales, each year, $90 billion gets returned (about 13 percent) according to The Wall Street Journal. That’s a lot of ugly clothes, boring video games, dull books, lame toys and unwanted sports equipment!

And stores take it all back?

It depends on the store. There’s no federal law regarding return policy, but most stores have 30- to 60-day return policies (over in cyberspace, Amazon’s is 30 days). Sometimes it can be as short as 15 days for electronics, especially if you’ve opened them. 

What about online?

Oh yeah — online returns are even more severe! The National Retail Federation says 15 to 30 percent of all online purchases are returned. That’s $32 billion! There are a couple reasons for the higher return rate: For one thing, people are now conditioned to free returns, so it doesn’t cost them anything. Secondly, the margin for error is a lot higher when shopping online: It’s harder to end up with what you want when you can’t actually try it on in person, or at least see it, feel it and kick the tires a bit.

Are there ever fees for returning?

Yes — some electronics stores have a restocking fee for opened merchandise.

Huh. What’s the most popular day that people return all this stuff?

This year, UPS estimates it’ll be January 2nd — it’s also known as National Returns Day. They’re expecting 1.9 million packages! Bear in mind that the average number of packages UPS moves in the month of December is about a million a day.

Got it, avoid January 2nd. What’s a good time to return stuff, then?

According to Reader’s Digest, it’s best to go when stores open — like, 10 a.m. Sunday tends to be the slowest morning, followed by Monday and Tuesday. Definitely avoid the mall on December 26th (that’s a big day for returns, too), but consider going to stores on New Year’s Day to return all that stuff you don’t want. Most people spend that holiday at home, or otherwise chilling. 

Do stores want any of this stuff back at all?

Hell no. Stores rarely have the room on their shelves or enough labor to determine if it’s damaged. Many retailers even add a second shift to help restock and process this stuff. Home Depot apparently has three distribution centers just dedicated to processing returns! 

How much does it cost a store, then?

It’s hard to say, though it’s certainly costly to restock, handle returns and clean up the mess. Personnel-wise, it’s essentially lost productivity. As far as the merchandise itself, the longer an item stays out of circulation and is unable to be sold, the less value it has.

How much of all the stuff we return to stores ends up back on the shelf?

About half.

That’s nuts. What happens to the other half??

That’s the interesting half. Of the rest — the damaged stuff, the opened boxes — about half is returned to the manufacturer, while much of the other half follows a bizarre supply chain. They’re often sold cheaply to liquidators and discounters, and from there, they can go a number of directions: Online auctions to consumers or wholesalers. Some people turn around and sell this used stuff on Amazon or eBay for a living. Other times it goes through a further supply chain, changing hands until it ends up at dollar stores, pawn shops, flea markets or overseas.

Then there’s the final portion that just ends up in a landfill — sad, but true. It’s hard to find numbers on this, since no store wants to admit to literally dumping merch, but it’s known to happen. If it’s the cheaper option, they’ll do it. 

So how do stores decide what goes where?

Increasingly, they no longer do: They outsource this returns process to a niche type of business, companies like Optoro and B-Stock Solutions. Each of these companies works with many of the nation’s biggest retailers. Essentially, they’re paid to triage and then deal with all the crap that Americans return. Optoro in particular uses AI to decide where a returned item can fetch the most money: restock it, return it to the manufacturer, list it on one of those secondary markets (Optoro has a B2B online marketplace as well as a consumer online marketplace for resold goods), refurbish it or donate it. 

Jesus. Only in America!

Not exactly — according to Amazon, more returns are processed in India than anywhere else in the world! Of course, the fact that there’s a billion people there may have something to do with it. 

So lastly, do I really need a receipt to return it?

It’s more or less essential if you want a refund. Stores like Nordstrom will take back almost anything, but at the majority of stores, lacking a receipt will get you store credit, or maybe an exchange, if you’re interested in that. Also, it always helps to not lose your cool if the cashier is giving you shit for it. Remember, you’re roughly the billionth asshole who’s walked up that day with an open box and no receipt, asking for their money back.

In any case, don’t forget your ID, put the item back in its original packaging, try not to go to the store at an insanely busy time and cross your fingers when you step up to the counter. Because nowadays, the holiday season isn’t truly over until you’ve gotten rid of all the shit some other person bought you to try and be nice.