Did you know that, worldwide, goods to the value of more than $640 billion are returned to retailers every year? Given the staggering value of returned products globally, it is little wonder that retailers are quick to sell returned goods wholesale to recoup some of their costs. But returned product destruction is the only safe way to deal with returned goods, as you will soon discover.
The Returned Products Epidemic
According to Market Watch, the “returned goods” industry the 21st largest economy in the world. The value of returned products worldwide is greater than the entire economy of Argentina, and only slightly behind the economy of Switzerland.
Consumers in the United States are some of the worst offenders, according to the research. Returned goods in the U.S. amounted to over $220 billion last year, and there is every indication that this figure will continue to grow.
It’s Worse for Online Retailers Than Brick-And-Mortar
The online marketplace has soared in popularity over the past few years, and is showing few signs of slowing down. With this increase in online retailing has also come a profound increase in product returns.
Invesp created the below infographic, which sets out the statistics in all their shocking glory: while less than 9% of purchases made in brick and mortar shops will end up being returned, more than 30% of online purchases will be subject to return.
Infographic by- Invesp Consulting
An Easy Returns Process
And since 92% of those surveyed admitted that they would be happy to purchase again from a store – even if they had returned a product from that same store in the past – if the returns process was simple and hassle free. Correspondingly, 79% of those surveyed said that, when ordering online, they expect free shipping for returned products. To keep up with demand, almost 50% of online retailers are now offering free return shipping. Indeed, they are somewhat forced to, or they risk losing valuable customers to their competitors who will offer free returns.
Options for Returned Products
And that leads companies to ask the inevitable question: what to do with returned items?
This is not an easy question to answer. With product returns at staggeringly high levels, profits margins of retail companies – from Fortune 500 giants to small-town brick-and-mortar business or one-person-run online stores – continue to be affected. It makes sense, then, for business owners to be keen to recoup some of their lost revenue while dealing with rejected materials.
Many companies choose to sell their returned items wholesale to bring in extra revenue. Others choose to make use of discount merchandise websites and the like to offload their returned products. Others still attempt to repurpose the returned products and on-sell them to other customers at full price.
Long-Term Risks and Short-Terms Rewards
However, while the short-term benefits of offering pallets of returned goods for sale or selling goods on discount merchandise websites may be attractive, long-term disadvantages are sure to arise. When customers can purchase name-brand goods from wholesalers or “seconds” stores, they inevitably come to associate that brand with “cheap” goods. Their thinking – whether they are aware of it or not – is along the lines of, “Why should I pay full price for a product when I can find the same item in a bargain bin at a factory direct store?”
Do you really want your branded products being sold for bargain-basement prices at factory direct outlets? Is that the image your brand is seeking to portray?
Invariably, the answer is a resounding “No!” After all, you have invested too much into your brand’s reputation to throw it away, simply by seeking to make short-term gains on returned products.
Returned Product Destruction: The Key to Dealing with Returned Goods
Returned product destruction is many successful, high-quality brands’ go-to SOP for returned products. Performed properly by a licensed, NAID certified data destruction company (the kind of company that specializes in off-site document shredding and hard drive data wiping), returned product destruction will eliminate any risk that could come from having your products end up in seconds stores, factory warehouses, or on wholesale discount stores.
Yes, returned products can take a toll on your company’s profit margin and bottom line. But isn’t it better to mitigate your losses, rather than putting your brand’s reputation through the wringer simply for a minimal short-term financial gain?
To chat with Data Destruction Corporation about returned product destruction, contact us today.