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What Really Happens When You Return All Your Bad Gifts?

What Really Happens When You Return All Your Bad Gifts?

Jaime Weibe

Photo via iStock

Photo via iStock

Everyone loves a Christmas tree piled with presents—and no one wants to believe their gifts, even those last minute Amazon grabs, won’t be loved long after the holidays are over. But not every gift-giver hits the nail precisely on the head. Try as you might, you’re probably going to give something—or get something—that isn’t exactly beloved, and once the glow of the season has past, those misguided gifts need to go somewhere.

Unfortunately, "somewhere" often means "the trash"

Every year we dutifully pack up our unwanted gifts and head to the return lines, imagining someone else plucking the misbegotten present from the shelves, giving it a home, and showering it with love—maybe even at a discount. But that’s not likely. According to Optoro, an optimization platform that helps companies manage returned inventory, people return $380 billion worth of product each year. The holidays are one of the biggest seasons for returns, accounting for approximately one-quarter—or $90 billion—of that total. And most of those unwanted gifts will never see a shelf again, leaving a staggering environmental impact in their wake.

What happens when you return?

Most of us assume if something has been worn or used, it can be resold to the next customer, but getting products from the return line back to the shelf is far more complicated than that. First, retail workers will ask: is this product perfect? Torn packaging, worn clothing, or scuffed-up toys never go back to the shelf.

"Returned product would only go back to the selling floor if it were in perfect condition," says Patty Soltis, who worked in retail management for more than 20 years, serving as a vice president and general manager for companies such as Lord & Taylor, Neiman Marcus, and Marshall Fields. "The item had to be as pristine as it was when it was originally purchased."

So that unopened Instant Pot—the second one you received? It will likely live another day. But if your daughter dumped out her Hogwarts LEGO set before whining that she wanted Star Wars instead, those plastic blocks will get bricked.

Optoro estimates half of all returns don't qualify for re-shelving. For consumers, weighing the environmental impact of imperfect presents becomes a tricky balance: Returning that Keurig might create more waste than donating or re-gifting the appliance (although keeping an unwanted gift does mean you can't buy something you desire more).

Doesn’t it all get resold to someone else?

Another common belief: If the store can’t put it back on the shelf, they’ll just sell it to another retailer who can. And while that does happen, it may not happen nearly as often as you think. Brian Sheehan is a sales manager at logistics company Hollingsworth, LLC, where he helps e-commerce companies manage returns. Ideally, products deemed unworthy by the retailer are recycled—or he could "find partners who want to purchase the items that can't be resold or refurbished," he says.

Those partners may include companies like Liquidity Services, which refurbishes and resells unwanted products. The company's Toronto warehouse handles about 50,000 returned items every few weeks. Previously, those products might be left for dead in the nearest dump, but Liquidity Services offers a more sustainable solution. Employees evaluate and categorize each new arrival, and most of them—about 70 percent—are suitable for resale.

Problem is, scaling this model can be tricky: Liquidity Services, like most refurbishing companies, sells product by the pallets to retail stores and internet resellers designed to sell “imperfect” goods, However, the complicated process of designating a return as imperfect but useable, storing the goods, and eventually selling them en-masse at a discount to refurbish buyers like Liquidity Services can be a hassle for retailers. Ultimately, many retailers skip this process altogether, write an imperfect return off as a loss, and send those piles straight to the landfill.

In Soltis's experience, "If an item showed any sign of use or had been altered, it was not placed back on the selling floor." These items would be marked MOS—or "mark out of stock"—and would be destroyed by the loss prevention team. About 1.5 percent of sales went through this process and ended up in the dumpster.

And then there’s the holidays

During the holidays, the rate of waste may increase as harried store employees permit more returns than usual. Consumers return more than $30 billion in product during the first week of January—so many that UPS nicknames Jan. 5 "National Returns Day."

"It can be stressful with the uptick in returns," says Sheehan. "Many companies allow more leniency during the holidays due to competition and customer satisfaction." Even with return policies in place, Sheehan says there are "one-offs that we may deal with on a case-by-case basis." Maybe Grandma Josie didn't include a receipt, or perhaps your cousin's youngest daughter spilled cranberry juice on the dress you really didn't want. With so many people clamoring for exceptions, employees might let more through.

The deluge of unwanted and returned gifts creates the perfect conditions for an environmental catastrophe. Tobin Moore, the founder of Optoro, estimated to Quartz that "reverse logistics," or the business of returning things, creates 4 billion pounds of waste each year.

Without intervention that number may very well increase. E-commerce sales increased 16 percent between 2016 and 2017, and Liquidity Services sees an estimated 20 percent year-over-year increase in online returns. As a result of the easy (and sometimes free) return policies of retailers like Amazon, Sephora, and Nordstrom, 15 and 30 percent of online purchases are returned. That's about $32 billion worth of product—much of which winds up in a landfill.

"Returns are a part of the business. As online shopping increases, returns will as well," says Soltis.

Cutting down on waste

British company Refundease evaluated the environmental impact of free return policies. Every year, 66 million products in London alone are returned to these retailers. The total environmental impact: 8500 metric tons of carbon dioxide per year. Ideally, retailers will come up with an more encompassing salvage plan that cuts those waste totals down, but until that happens, there’s a few things you can do as a consumer to make sure what’s under the tree this year doesn’t end up in the trash next year.

If you're serious about reducing your waste, you might reconsider returning that unwanted Keurig unless the cling wrap remains unbroken. Even pulling off the tape to see what’s inside the box can cause enough damage to deem something imperfect. Pain as it may be, storing stuff in a clean, dry place away from small prying hands until you can get to Target can help.

If stuff has been tampered with, and you aren’t sure it’ll make it back on the shelves, donating is another good option. It is a drag not to get to replace an unwanted gift with something better, but you will be able to use the donation on your next tax returns, which will sure feel like a gift come April. And when you’re buying, consider the potential environmental impacts of your holiday gifts before heading to the checkout counter. It's easy to pick up silly knick-knacks you think might entertain your aunts—but if Aunt Bertha heads straight for the returns department, perhaps you're better off buying a gift card.

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