What happens to all the stuff we return?

From the article:

Earlier this year, I attended a three-day conference, in Las Vegas, conducted by the Reverse Logistics Association, a trade group whose members deal in various ways with product returns, unsold inventories, and other capitalist jetsam. The field is large and growing. Dale Rogers, a business professor at Arizona State, gave a joint presentation with his son Zachary, a business professor at Colorado State, during which they said that winter-holiday returns in the United States are now worth more than three hundred billion dollars a year. Zachary said, “So one and a half per cent of U.S. G.D.P.—which would be bigger than the G.D.P. of many countries around the world—is just the stuff that people got for Christmas and said, ‘Nah, do they have blue?’ ” The annual retail value of returned goods in the U.S. is said to be approaching a trillion dollars.

Most online shoppers assume that items they return go back into regular inventory, to be sold again at full price. That rarely happens. On the last day of the R.L.A. conference, I joined a “champagne roundtable” led by Nikos Papaioannou, who manages returns of Amazon’s house-brand electronic devices, including Kindles, Echos, and Blink home-security systems. He said that every item that’s returned to Amazon is subjected to what’s referred to in the reverse-logistics world as triage, beginning with an analysis of its condition. I asked what proportion of triaged products are resold as new.

“It’s minimal,” he said. “I’m not going to give you a specific number, because it’s so dependent on the product category. But our approach with this question is that, if the seal has been broken, if the wrap is not intact, then it’s not going back to the shelf.” Even though Papaioannou understands this fact as well as anyone, he said, he often shops the way the rest of us do. When he buys shoes, for example, he typically orders two pairs, a half size apart. In brick-and-mortar stores, a pair of tried-on shoes will be re-boxed and reshelved. “From an Amazon viewpoint, the moment the box opens, you’ve lost the opportunity,” he said.

For a long time, a shocking percentage of online returns were simply junked. The industry term is D.I.F., for “destroy in field.” (The Web site of Patriot Shredding, based in Maryland, says, “Product destruction allows you to protect your organization’s reputation and focus on the future.”) This still happens with cheap clothes, defective gadgets, and luxury items whose brand owners don’t want a presence at Ocean State Job Lot, but, in most product categories, it’s less common than it used to be. Almost all the attendees at the R.L.A. conference, of whom there were more than eight hundred, are involved, in one way or another, in seeking profitable, efficient, and (to the extent possible) environmentally conscionable ways of managing the detritus of unfettered consumerism. “Returns are inherently entrepreneurial,” Fara Alexander, the director of brand marketing at goTRG, a returns-management company based in Miami, told me. She and many thousands of people like her are active participants in the rapidly evolving but still only semi-visible economic universe known as the reverse supply chain.

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A century ago, the average return rate at Penney’s was probably something like two per cent; before Internet shopping truly took hold, retail returns had risen to more like eight or ten per cent. Returns to online retailers now average close to twenty per cent, and returns of apparel are often double that. Among the many reasons: products often look nothing like their online images—such as a crocheted bikini top that was barely big enough for the purchaser’s cat—and colors and fabrics appear different on different screens.

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Elsewhere, I saw technicians at long counters working on robotic vacuum cleaners. The units were plugged into outlets under the counter—they have to be charged before they can be evaluated—and hundreds, if not thousands, more were stacked nearby, on tall warehouse shelves. “The No. 1 issue with robot vacs is that people don’t know how to use them,” Adamson said. This is partly because the buyers tend to be older, but also because successfully making the necessary Wi-Fi connection can be frustrating even to people who do read instructions—an issue with other products as well. “A really good partner of ours does over fifty per cent of all the refurbishing of HP consumer printers in the U.S.,” Adamson said. “On all the newer printers, the only connection option is Wi-Fi, so when they refurb them they include a printer cable. Problem solved.”