Liquidation warehouses in the U.S have been filling up recently as inflation rises and COVID-19 becomes less of a concern. As a result, consumers have been spending more on essentials such as food and gas, returning many of their online purchases.
According to a report by the trade group National Retail Federation and the software firm Appriss Retail, shoppers returned an average of 16.6 percent of their purchases last year, which is significantly more than the pre-pandemic 8.3% in 2019. The surplus of products is “unprecedented,” according to Chuck Johnston, a chief strategy officer at goTRG, a firm which helps retailers manage returns. In fact, executives are warning that retailers could run out of space to store all the unsold goods.
The number of products being returned has been increasing for a while, but the surge in popularity of online shopping has only heightened the crisis. According to industry analysts, consumers have begun to expect that everything can be returned, leading to an increase in returns. In addition, according to the report by The National Retail Federation and Appriss Retail, over 10 percent of returns in 2021 involved fraud; consumers returned products despite having already used them and stole goods before returning them with fake receipts.
A portion of the excess inventory will be donated to charities or even returned to the manufacturers. Another portion is being dumped into landfills, recycled, or burned in electricity generating incinerators.
However, liquidators are also offering the products to new buyers. One such buyer is 54-year-old Mr. Crowley, who resells discounted home improvement products to local contractors. “I end up giving a lot of it away to my neighbors, to be honest,” Crowley admits. “Some people are barely getting by.”
Sources: https://www.nytimes.com/2022/07/30/business/retail-returns-liquidation.html
According to a report by the trade group National Retail Federation and the software firm Appriss Retail, shoppers returned an average of 16.6 percent of their purchases last year, which is significantly more than the pre-pandemic 8.3% in 2019. The surplus of products is “unprecedented,” according to Chuck Johnston, a chief strategy officer at goTRG, a firm which helps retailers manage returns. In fact, executives are warning that retailers could run out of space to store all the unsold goods.
The number of products being returned has been increasing for a while, but the surge in popularity of online shopping has only heightened the crisis. According to industry analysts, consumers have begun to expect that everything can be returned, leading to an increase in returns. In addition, according to the report by The National Retail Federation and Appriss Retail, over 10 percent of returns in 2021 involved fraud; consumers returned products despite having already used them and stole goods before returning them with fake receipts.
A portion of the excess inventory will be donated to charities or even returned to the manufacturers. Another portion is being dumped into landfills, recycled, or burned in electricity generating incinerators.
However, liquidators are also offering the products to new buyers. One such buyer is 54-year-old Mr. Crowley, who resells discounted home improvement products to local contractors. “I end up giving a lot of it away to my neighbors, to be honest,” Crowley admits. “Some people are barely getting by.”
Sources: https://www.nytimes.com/2022/07/30/business/retail-returns-liquidation.html
