January is the prime month for holiday gift returns. But before you take that gift back, here's a warning: Returns impact our environment.
"This year alone, the U.S. would have returned products worth half a trillion dollars. In the holiday season alone, it would be about $120 to $150 billion," Arizona State University professor Hitendra Chaturvedi said.
Many retailers acknowledge that 25% of returns end up being tossed out. But it's much more than that according to Chaturvedi, who is an expert on supply chain management.
He estimates more than 80% of returns end up in landfills or shipped to developing countries as garbage. While some returned products move through secondary markets after being bought from large retailers, more are discarded. In the end, a returned item can cost more to resell than throwing it away.
"The cost to process it during COVID times — when you have to sanitize it and repackage — the cost to process it is more than the value of the product," Chaturvedi said.
So it ends up in the landfill. Returned inventory creates 5.8 billion pounds of waste each year according to Optoro, a logistics company that specializes in returned merchandise.
"The returns problem is only going to continue increasing this year and in the coming years," Optoro director of sustainability Meagan Knowlton said. "And luckily, quite a number of retailers and brands in the market are recognizing it as a problem, but also as an opportunity."
An opportunity to address sustainability. Aside from more products ending up in landfills, trucks re-shipping the products back create greenhouse gas emissions.
"Every item created about half a pound of greenhouse gases through the journey," Chaturvedi said.
Companies like Optoro help companies manage product returns efficiently and resells returned goods in bulk so they don’t end up in a landfill. Chaturvedi says sustainable return processes can be profitable — it's great PR, it makes for good customer service and companies can efficiently resell and reuse products.
And there are ways consumers can help.
Knowlton says: "Really think about what you're buying and what you're consuming and in the context of gift giving, are you giving people a product that they are truly going to use?"
Other ways: return products as quickly as possible and don't wait until the end of the return window so it can get relisted. Lastly, buy from companies that spell out ways they use sustainable approaches to returns.
