And there's just a lot of stuff that research can't tell you. Sometimes listed dimensions are incorrect or missing. Sometimes it turns out that you buy a simple electronic device that seems like it will do what you need but it emits a high-pitched beep noise every time you press a button that drives you nuts and you're going to return it because of that. There are so many things that just simply are not captured in a product description, and sometimes are not captured by user reviews.
I've just ordered an inexpensive steering wheel to use with a racing game. And everything I can find online is contradictory as to whether it suffers from a dead zone problem or not. I simply cannot tell if the people complaining about the dead zone have missed where it can be configured or if it's a problem with the hardware itself. So literally the only way I can figure it out is by ordering it and trying it out and then returning it if it has a dead zone problem.
There are plenty of things that you just have to return that cannot be solved with research and have nothing to do with being scammed. Which is why returns are a big part of the economy and a big part of customer service.
I used to take advantage of Amazon's return policy by deliberately buying 3 sizes of the same item (1 below and 1 above my expected size) because clothing manufacturers are not consistent with their sizing. I can then try them all at home to choose best size and return the other 2 that don't fit. I did this for pants, shoes, etc. This really seemed great because I hate going to the store and changing clothes in fitting rooms.
However, I stopped doing this many years ago because I found out that some online retailers like Amazon do not restock the returned items for re-sale and instead, throw it away so it eventually ends up in a landfill. In those cases, the sellers just eat the cost of unsold goods that got thrown out.
It seemed illogical to throw away perfectly good clothes that are still NEW but somebody explained that Amazon does this because they're paranoid about bodily fluids etc tainting the returns. So to play it safe, they just throw away the returns.
I have no more insider knowledge of how Amazon operates than you do, but judging on the amount of items I’ve received that were clearly used (stains, other people’s hairs, dust, dirt…) but sold as new I’m fairly certain they’ll resell everything that gets returns without even looking at the items.
Also Zappos was clearly founded on the idea of ordering 3 pairs of shoes and keeping the one that fits. They say the returns go back for sale unless used and then go to charity/reuse, but happy to see other sources you have. I think a lot of that Zappos dna went into Amazon's policies.
The food and groceries I already knew about. However, Amazon throwing out returned clothes was a surprise because I've seen clothing retailers like Macy's just put the returned items right back on the rack for re-sale. When you go to a shore store, they don't throw out every pair of shoes that customers tried on and didn't buy. So I just thought Amazon just did the same thing at their warehouse. I've also returned car wax to an OReilly's Auto store and I watched the clerk just put the bottle right back on the shelf for the next customer to buy.
It was disconcerting to find out I was adding to the landfill just because I returned clothes to Amazon. Nowadays, I don't order clothes from them unless I'm 100% sure I won't be returning it.
This was essentially false, and FUD spread by the anti-Amazon crowd.
You will observe official Amazon Resale listings for many items, which is precisely Amazon restocking the returned items. For goods of any signficant value, it is bizarre to suggest that Amazon wouldn't be reselling them. Like, it's ludicrous to suggest they're tossing a $50 shirt instead of reselling it, as long as the return is in resale condition.
What Amazon sends to landfills is when items (mostly third-party seller items) aren't selling and the seller doesn't want to keep paying for warehousing or to have them shipped elsewhere so Amazon sends them to landfills. Because nobody is buying the items, there's no demand for them. Not everything sells.
Wherever you got the idea that they're paranoid about body fluids, that's somebody who doesn't know what they're talking about. People make up all sorts of things. That's why that have a small army of people inspecting returns.
To clarify, I'm already aware Amazon re-sells returns. I often buy "Used Like New" electronics from Amazon Resale which are obviously customer returns that Amazon re-boxed. However, the category of clothes is different where it customer returns are often thrown out.
>What Amazon sends to landfills is when items (mostly third-party seller items) aren't selling and the seller doesn't want to keep paying for warehousing or to have them shipped elsewhere so Amazon sends them to landfills.
No, that's not the full story. What's also happening is that a seller has different options for Amazon's reverse logistics and they have different costs.
E.g. pay $1.50 for Amazon to inspect and resell or pay a lower $0.52 to throw it away. A lot of sellers just pay 1/3rd less and let Amazon throw it out.
That possibility of me inadvertently adding to landfills is enough to stop me from buying 3 sizes and returning 2. Maybe in some circumstances the other 2 returned items won't be thrown out -- but I can't know for sure so I won't do it. I'll continue to buy clothes from Amazon but only do so when I'm 100% sure I'm going to keep it no matter what.
Deep link to a video comment about online returned clothes: https://www.youtube.com/watch?v=66qOop6J8Q8&t=2m56s
Because it's not about $1.50 for inspection vs $0.52 to throw it out.
It's about -$1.50 + $8 profit = $6.50 gain for inspection vs. -$0.52 + $0 profit = $0.52 loss for throwing it out.
You're missing the entire resale price on the return. Companies aren't leaving money on the table. They are looking to maximize profit and minimize losses. In most places, sending resellable stock to the landfill isn't doing that.
However, there is an obvious incentive to minimize these no-return refunds and require users to print labels and go through the motion of returning items that won't be restocked.
It discourages fraud: people abusing the no-return refund as a way of getting free stuff!
The no-return refund has to be a kind of perk for the customer who rarely returns anything or whatever.
I would say that it would be astonishing if Amazon pretending to accept returns and then throwing away is a thing that absolutely does not happen, and honestly cannot blame them for it. We are a throw-away-stuff society, and Amazon is not outside of that society.
What Amazon does with returns doesn't have anything to do with what kind of "society" you think we are.
What it does with returns is determined by the profit motive.
And in most cases, the more profitable thing to do is to resell returned merchandise. Yes, return inspections cost money, but usually less money than what is gained by reselling the item.
Returned merchandise has value, and businesses don't make profit by throwing value away when they can make money with it or reduce losses with it instead.
I genuinely don't understand all the people who think it's more cost-effective for Amazon to send a $50 shirt to the dumpster rather than resell it. That's not how anything works.
> It's more cost-effective for Amazon to send a $50 shirt to the dumpster rather than resell it.
It's not a $50 shirt. It's like a $5 shirt to them, which some sucker is willing to pay $50 for. Used, it becomes a $10 shirt.
A dumpster can be found right in the neck of the woods of where the returning customer lives, whereas it may have to travel far and pass through more processing if it goes to another customer elsewhere.
It needs to be inspected, repacked.
There is a risk in every returned item. Sometimes people return a perfectly good item. But sometimes it's because there is something wrong with the item, such that the next buyer is also likely to return it, even if they get it cheaper.
Basically returned items are entirely outside of the profit-optimized delivery path. They incur costs and risks, at a reduced revenue.
I'd never return an item which matches the description and isn't damaged.
If it isn't damaged in any way but does not match the description, that's a problem; if it is sold with the same description, the next customer will also see that it doesn't match. A new listing has to be created for that product. Not gonna happen, or not in the processing time frame of that particular return.
That's where your argument is completely mistaken. Stores don't have those kinds of profit margins, that would be absurd. That's the whole point here.
If Amazon is selling a shirt for $50, then they are probably acquiring it for $25-30.
Believe me, they don't want to throw away that $25-30. That's not how businesses operate.
That the part you and a lot of other people seem to be missing here.
How a business operates is:
1. Going forward, ignoring the prior costs associated with the item, is there an expectation that the item will bring in more revenue than what it costs to further handle and move it? (Taking into account its adjusted price, and the probability that it will be returned again by a new buyer?)
2. Is that profit good enough to justify taking away logistics resources from some new item? In every situation in which a returned item is being moved or handled, it displaces a new item that is not being moved or handled.
The point of the $5 is not to discuss a sunk cost, but to point out that producing a new item isn't expensive. If producing a replacement item is expensive, that means that a new item is less profitable than if it were cheaper to produce. If a new item is less profitable, then the returned item has a lower bar of profitability to pass in order to be viable.
But a returned item is likely not even compared to an identical item anyway, but to some average profitability of moving any item whatsoever which has around the same size and weight.
Continuing with the same example, suppose the shirt cost Amazon $25 and they sell it for $50.
They receive a return.
They can either lose $.50 by sending it to a landfill.
Or they can gain more like $18 by inspecting it and reselling it by shipping it to a new customer.
Understand now?
Procuring a new item that sells retail for $50 is expensive. It doesn't cost Amazon five dollars. It costs Amazon $25-30 generally. Do you get that?
The key you're missing is Amazon didn't have to spend that ~$25 in the first place.
I'm guessing your assumption of Amazon's out-of-pocket cost is the source of your insistence that Amazon is determined to restock and re-sale instead of throwaway. That mental model of how big retailers operate is incorrect.
The giant retailers like Amazon/Walmart/Target don't pay upfront for merchandise. Instead, they use a complicated "chargeback model". They just deduct customer returns from the ongoing rolling invoices "net 90" etc.
https://www.google.com/search?q=amazon+walmart+target+%22net...
So, Amazon doesn't really "lose money" for customer returns if they don't re-stock & resell. It's the manufacturers and sellers that take the financial hit. (Which would be the much lower ~$5 instead of $25.) The above chargeback model is why Amazon was so nonchalant about throwing away perfectly good items that were returned by customers. Amazon wasn't incentivized to bother trying to re-sell it. Instead of taking a risk with a tainted customer return, just mathematically deduct it from the next vendor's payment. No ~$25 wholesale cost needs to be "recovered" because Amazon never spent it.
>That's not how businesses operate.
It is (or was) how they operated. That isn't FUD. Canada, France, Germany did investigative reports with hidden cameras and GPS trackers to discover that billions in Amazon merchandise was being dump at landfills and/or burned at incinerators. (What Amazon euphemistically calls "energy recovery"). This includes lots of expensive items that were more than ~$4 such as new coffee machines. The public relations backlash at Amazon destroying so much product was so bad that France passed a new law targeted at Amazon to stop doing it: https://www.google.com/search?q=amazon+france+passes+new+law...
That's when Amazon started a more earnest "re-sale or donate" and reduce the destruction of customer returns.
It is true that it may pay suppliers only 90 days later or something, but this doesn't change the fact that they still have to pay suppliers.
I genuinely don't know where you are getting your information from, but it is quite wrong.
And as I said before, the stuff that Amazon sends to landfills, has a little to do with the fact that it has been returned (except for things that are so damaged they cannot be resold), and everything to do with the fact that there is no longer demand for it and they need their warehouse space for products that sell better.
No, not a consignment model. A "chargeback model".
>, but this doesn't change the fact that they still have to pay suppliers.
Not for the returned items. The returned items are deducted from the next unpaid vendor invoice. (The "vendor chargeback" or "vendor clawback" in industry parlance). All the big retailers with leverage such as Walmart/Amazon/Target/HomeDepot/BestBuy etc do this. It makes the financial hit from customer returns mostly the vendors' problem instead of Amazon's.
>, has a little to do with the fact that it has been returned (except for things that are so damaged
The new law in France was trying to stop Amazon from destroying undamaged products because of investigative reports. Again, Amazon didn't care about sending undamaged returned merchandise to the landfill by the truckloads because of the chargebacks above. In other words, Amazon never "bought" the items the customers returned.
If it was expensive items like electronics, they would ship it back to the supplier or a liquidator for resale but that often didn't happen for clothes because it wasn't worth it the extra costs to the supplier. That's why a lot of it went to the landfills.
Yes, major retailers have various agreements with manufacturers. Sometimes it's return-to-vendor, because the manufacturer wants the returned items back in order to refurbish and resell itself, etc. Sometimes there are return allowances, such as a 3% rate, meant to cover an expected return rate regardless of return reason, or they negotiate with Amazon for it to determine which returns are genuinely defective, and then those and only those get effectively reimbursed.
But it is completely false to say that Amazon is generally able to pass on the cost of all its returns to manufacturers, that this makes returns zero-cost for Amazon, and that it therefore just tosses returns in landfills. That's not how anything works. Neither manufacturers nor Amazon have any kind of financial incentive to just dump returned merchandise that can still be profitably resold.
The vendor agreements say if the returns are Amazon's fault, they will not deduct from remittances. If you're a vendor/seller, you use the Amazon Vendor Portal to look at the account status of invoices, purchase orders, inventory, returns, payments, deductions, etc: https://vendorcentral.amazon.com/
When a customer returns something, they can pick from a menu of reasons such as "not as described", "changed my mind", or "wrong size", etc. For those reasons, the amount is always deducted from the seller's account because none of those reasons are Amazon's fault. (Again, Amazon didn't spend the ~$25 for $50 shirt that they're desperate to recover as you're claiming.) In many cases, the seller doesn't want to pay extra to ship the returned items back so they just let Amazon throw it away. That's how a high volume of perfectly resellable items end up in the garbage -- especially before the bad publicity in 2019. Amazon has reduced the environmental pollution of customer returns by giving more options to sellers to restock and resell but it's still not totally eliminated.
EDIT to reply: >Under first-party, Amazon is still purchasing the goods wholesale. Amazon absolutely spent the $25 for the $50 shirt. That is just how it works.
In a 1P relationship (not 3P), Amazon will deduct the wholesale $25 amount caused by customer returns from the next payment to the vendor/supplier. That's how it works. Yes, Amazon acting as 1P buys wholesale -- but they can also deduct the wholesale amounts owed to the supplier for customer returns that are not their fault.
I can't copy&paste the Amazon 1P vendor agreement but here's a similar one from Costco and notice the verbiage:
>14. CUSTOMER RETURNS. Costco may pursuant to Section 13.1 reject or revoke acceptance of and return to Supplier any Product returned by Costco’s customers. For any Products returned by customers, Costco reserves the right to return such Products to Supplier or to salvage, donate, dispose of, re-use, refurbish or recycle such Products at Supplier’s sole cost and expense.
Similar wording for the big retailers like Walmart, Target, etc.
>Nobody on either side is throwing away perfectly good, sellable merchandise just for the fun of it.
You keep repeating this but the investigative reports with GPS trackers put inside new items immediately returned to amazon to trace where they go and hidden cameras at landfills and industrial shredding facilities that receive truckloads of Amazon customer returns shows otherwise. The volume of it has been reduced somewhat, but not eliminated. Amazon doesn't throwaway all resellable items, but they still throw away a lot of it.
When you talk about being "deducted from the seller's account", you're talking about its third-party marketplace business. But when you talk about Vendor Central, you're talking about Amazon's first-party wholesale business.
Under first-party, Amazon is still purchasing the goods wholesale. Amazon absolutely spent the $25 for the $50 shirt. That's just how it works. That's the main discussion we're having. For you to claim otherwise is just flat-out wrong.
The drop-down about the return reasons, and about a seller choosing what to do with returned merchandise, that's about the third-party marketplace. That's a totally separate discussion, but it has nothing to do with the chargeback model you were talking about, and those are decisions sellers are making, not Amazon. And sellers are still making those decisions based on what is most profitable. If an item is "perfectly resellable", then they're still being restocked and resold. Nobody on either side is throwing away perfectly good, sellable merchandise just for the fun of it. If they think there's value in it, it gets resold.
Also:
>> Nobody on either side is throwing away perfectly good, sellable merchandise just for the fun of it.
> You keep repeating this but the investigative reports with GPS trackers put inside new items immediately returned to amazon to trace where they go and hidden cameras at landfills and industrial shredding facilities that receive truckloads of Amazon customer returns shows otherwise. The volume of it has been reduced somewhat, but not eliminated.
Just because it happened once with some items doesn't mean it's a pattern. Obviously, journalists are looking for a "gotcha" here. They're focused on finding the times when Amazon misclassified returns, or when the item is no longer selling, or whatever. They're not writing up stories when their GPS trackers showed that the items got resold.
You're trying to push an agenda here, and I'm done talking. You are falsely mischaracterizing how Amazon returns work and the financial incentives. I'm not saying Amazon doesn't throw out some returns that aren't worth reselling -- literally all retailers do this -- but this narrative that it's somehow magically cheaper for Amazon to just throw out otherwise resellable returns as a matter of standard practice is just false.
No agenda. I've been a Amazon customer for almost 30 years and not trying to run a smear campaign. I buy from them every week. I'm just explaining why I've revised my thinking about the "shopping hack" of buying 3-and-return-2 that I used to think was harmless and supposedly a "win/win" for both me and Amazon. My intuition thought Amazon would always restock and resell the other 2 was wrong. Maybe they will but there's a good chance they won't and I'm not interested in being the cause of more environmental pollution. So I try to be more conscientious and avoid frivolously returning things.
Several reasons combine to cause the "illogical" disposal of undamaged returned goods:
- delayed vendor payments (NET90) and how Amazon can deduct the cost of customer returns. That the hidden "perverse incentive" that reduces Amazon's "skin in the game" and motivation to resell it. They're no longer financially on the hook to pay wholesale costs for those returns.
- vendor calculates it's not worth the cost of re-inspecting and re-stocking the merchandise. If the NEW item is now OPEN BOX and must be priced much lower, it negatively affects the ROI calculation even further.
- vendor decides that the extra risk of customers tainting the returned items and causing the next customer to leave a 1 start review (which lowers future sales) is not worth it
The above factors are especially relevant to clothes. I'm ok buying and then returning a Bosch power drill for $200 because I'm confident that the reverse logistics will go through a liquidator instead of the landfill. However, I don't have the same confidence for a $50 shirt. It's the ~$5 vendor's cost not the $25 wholesale cost that must be used as basis for calculating ROI of risk-vs-resale and we have to be realistic that will often favor the landfill.
Say Amazon projected a $25 profit on the item originally based on a revenue of $50. Meaning their total cost had to be $25: procuring the item and shipping it. That didn't work out; so at that point they have a loss of $25.
That doesn't matter; it's all sunk costs at that point.
They have an opportunity to recover the item from the user. How profitable will it be? Let's say there is 60% chance that the item is junk that the next user will also return. Let's say it costs $5 to ship it back to Amazon, and another $5 to ship it to a new user. Let's say it can only be sold for $35 and not $50.
The probability of keeping the $35 revenue is 40%, and so the expected revenue is 0.4 times 35 or $14. We have to subtract the shipping both ways, leaving $4.
Thus the new business venture of recovering the item and reselling it has an expected profit of $4.
This is a waste of time, even though the profit is nonzero.
It is better to procure a new item and make $25.
A truck full of items that make $25 is better than one full of the same items that make $4.
Your figures are all extremely exaggerated. If it's a normal piece of clothing, there isn't a 60% chance the next user will also return it. It costs nothing close to $5 to send something back when it's dropped off at Whole Foods or Staples or whatever, and Amazon's shipping costs are also much less than $5. Many items are resold at full price as well. You're also double-counting -- new items have a risk of getting returned as well (obviously), and there's the same shipping price in sending out returned items as used items.
Obviously when it is no longer profitable to resell a return, it gets discarded. Obviously, this happens when the return is too damaged or defective.
But you also have to realize that there are a lot of people who are willing to buy an open-box scratched item for 60% off, who simply can't afford the full-price item new. And a lot of people who will never buy the open-box scratched item under any circumstances. Selling returns allows Amazon to make money off both.
Just think about it this way: once we write off the sunk costs of a return, Amazon basically has zero-cost merchandise on its hands. If you think of it that way, then they can make more profit off the returned item than off the original. They're no longer making their expected $25 profit, they're making $50 profit, in your example. It would be business insanity to throw those items away instead.
I was surprised since I usually do research and stuff on the options. But it turns out a lot of people just click next until they can start watching some tv.