The Problem With Online Returns

Until fairly recently, we did most of our shopping at brick-and-mortar stores, where consumers could get a feel for products before buying them. But as online shopping has become more seamless—with many companies offering fast, free shipping—Americans are increasingly buying online. And that shift has accelerated rapidly during the pandemic, experts say.

“We were sitting in our houses and couldn’t go to stores, so we went shopping online with a vengeance,” says Hitendra Chaturvedi, a professor and supply chain management expert at Arizona State University.

Until fairly recently, we did most of our shopping at brick-and-mortar stores. While shopping in person, people could get a feel for products before buying them. But online shopping has become much easier. In fact, many companies now offer fast, free shipping. As a result, Americans are increasingly buying online. And that shift has sped up during the pandemic, experts say.

“We were sitting in our houses and couldn’t go to stores, so we went shopping online with a vengeance,” says Hitendra Chaturvedi, a professor and supply chain management expert at Arizona State University.

When shoppers can’t physically examine products before purchase, they’re more likely to end up with clothes that don’t fit or items that don’t suit their needs. People return on average about 25 percent of what they buy online, compared with about 8 percent of what they buy in stores, Chaturvedi says.

But here’s something you probably didn’t know: Many items that get returned never go back on sale. Instead, they’re often thrown out, even if they’re still brand-new. About 5 billion pounds of returned goods end up in landfills each year, according to logistics company Optoro.

It sounds shocking, but it all comes down to cost. When you send a product back, companies already owe you a refund, and it would cost them even more to ship the merchandise to a sorting facility and have someone evaluate whether it can be sold again, says Gad Allon, a professor of operations, information, and decisions at the University of Pennsylvania.

“At this stage, every person that touches that item is adding cost, but the company doesn’t earn any value,” he explains. Because of this, “the majority of things that are returned are most likely new and never return to be sold again as new.”

When shoppers can’t physically check out products before buying them, they’re more likely to end up with clothes that don’t fit or items that don’t suit their needs. People return on average about 25 percent of what they buy online, compared with about 8 percent of what they buy in stores, Chaturvedi says.

But here’s something you probably didn’t know: Many items that get returned never go back on sale. Instead, they’re often thrown out, even if they’re still brand-new. About 5 billion pounds of returned goods end up in landfills each year, according to logistics company Optoro.

It sounds shocking, but it all comes down to cost. When you send a product back, companies owe you a refund. It would cost them even more to ship the item to a sorting facility and have someone check whether it can be sold again, says Gad Allon, a professor of operations, information, and decisions at the University of Pennsylvania.

“At this stage, every person that touches that item is adding cost, but the company doesn’t earn any value,” he explains. Because of this, “the majority of things that are returned are most likely new and never return to be sold again as new.”

Although it’s unlikely that returned items will be sold as new, some items get sent to discount or thrift stores, while things like electronics could get stripped for parts. Other unwanted items might be sent overseas—although many could still end up in the garbage eventually.

“If you follow the life of a product as it gets returned, there’s a very high probability these days that its last resting place could potentially be in a landfill,” Chaturvedi says.

It’s unlikely that returned items will be sold as new. Still, some items get sent to discount or thrift stores. And things like electronics could get stripped for parts. Other unwanted items might be sent overseas. Even then, many could still end up in the garbage.

“If you follow the life of a product as it gets returned, there’s a very high probability these days that its last resting place could potentially be in a landfill,” Chaturvedi says.

It’s hard to collect specific data, industry experts say, because no company wants to admit that it’s throwing out products. But there’s evidence that one of the world’s largest online retailers is doing just that: In 2020, France outlawed the destruction of unsold consumer goods after an investigation found Amazon routinely sent a billion items to landfills in Europe each year.

In response, Amazon said it was striving “to reduce the number of products for which there was no other choice but destruction,” adding that only a fraction of unsold goods were destroyed.

In 2020, the Canadian Broadcasting Corporation did its own investigation, purchasing and returning 12 items from Amazon Canada. Using hidden cameras and trackers, the investigators found that four of the items were resold. Months after being returned, others were still languishing in warehouses, while at least one had been sent to a landfill.

It’s hard to collect specific data, industry experts say. That’s because no company wants to admit that it’s throwing out products. But there’s evidence that one of the world’s largest online retailers, Amazon, is doing just that. In 2020, France outlawed the destruction of unsold consumer goods. The move came after an investigation found Amazon routinely sent a billion items to landfills in Europe each year.

In response, Amazon said it was striving “to reduce the number of products for which there was no other choice but destruction.” The company added that only a fraction of unsold goods was destroyed.

In 2020, the Canadian Broadcasting Corporation did its own investigation. The company purchased and returned 12 items from Amazon Canada. Using hidden cameras and trackers, the investigators found that four of the items were resold. Months after being returned, others were still sitting in warehouses. In the end, at least one had been sent to a landfill.

In some cases, giant retailers like Amazon and Target have begun telling customers to just keep their unwanted items rather than send them back. Third-party logistics businesses have also popped up to help companies clean up the return process. But that’s not enough on its own, Allon says.

If you want to make a difference, consider returning items at a store, where experts say they’re more likely to go back on a shelf, rather than mailing them back to a warehouse. Buying less overall and shopping with companies that prioritize the planet helps too.

“If we continue to shop without thinking about the environmental impacts of our decisions, we will ultimately have . . . very unsustainable supply chains,” Allon says. “Everything boils down to us as consumers at the end.”

In some cases, giant retailers like Amazon and Target have begun telling customers to just keep their unwanted items rather than send them back. Third-party logistics businesses have also popped up. They’re helping companies clean up the return process. But that’s not enough on its own, Allon says.

If you want to make a difference, don’t mail items back to a warehouse. Instead, consider returning them at a store. If you do so, experts say they’re more likely to go back on a shelf. Buying less and shopping with companies that care about the planet helps too.

“If we continue to shop without thinking about the environmental impacts of our decisions, we will ultimately have . . . very unsustainable supply chains,” Allon says. “Everything boils down to us as consumers at the end.”