This past week, there has been a lot of chatter on the news regarding the return policies of some big box companies such as Amazon and Walmart. In 2020 alone, online sales accounted for $565 billion dollars, and generated approximately $102 billion dollars in returns, which is more the average return rate in previous years. It’s safe to assume that this can be attributed to the pandemic. With few people frequenting brick and mortar stores, shopping trends continued online instead. One of the pitfalls of online shopping is that it’s easy to overlook the quality of items when you can’t put your hands on those items. Thus, causing the rise in online returns.
It’s easy to see that things are changing in retail as companies are scrambling to stay relevant in a world where brick and mortar stores are not seeing as much traffic and online shopping is on the rise. Retailers are finding that with more and more consumers initiating returns, it’s doesn’t make financial sense to make customers return some lower cost items back into the store. So, in many cases, they’re asking customers to keep or donate the items and, in return, receive the full refund.
Many stores have been relatively quiet about this, hoping to avoid the inevitable fraud that comes with policies like this one. Of course, larger purchases will require a return back to the store they came from because it is still makes financial sense. But for other, smaller purchases, customers shouldn’t be surprised if retailers give the full refund without asking for the product back.
But what does that mean for us resellers?
The conversation has been going about in the reselling community and many who purchase liquidation are understandably concerned about what this means for inventory. We are also concerned, as our favorite pallets include returns from Amazon—one of the main companies named who adopted the “keep it” return policy.
Low Inventory or Higher Prices?
When Storage Wars aired on A&E, those resellers who sought inventory through abandoned storage units found the prices went so high they were almost unaffordable except for a few resellers and hobbyists. Understandably, when Extreme Unboxing aired in August of 2020, resellers were worried about the same thing happening to pallet sales.
I don’t know that we have to be concerned about astronomical prices in pallets. We may see a slight rise here and there depending on the supply and economy, but there’s really a cap in how much liquidators can sell these pallets. Unlike storage units which can hold an unlimited amount of money in them, pallets can only hold so much money in their inventory.
Whereas storage units can have inventory from anywhere, including collectable, priceless, and one-of-a-kind items, pallets will rarely, if ever, have items like that. We know where these items are coming from, and you don’t have any reason to expect items that you wouldn’t find at the store yourself.
I think the big issue we’re going to run into here is a low supply of return pallets from these stores. You’ll still have in-store returns, and the few items that they do request returns from in the online arena. This means that the pallets will still be there, but there may not be as many. In cases like Amazon, where they do not have general merchandise stores to return items back to, you may find even less return pallets available there.
But don’t forget, we still have overstock and shelf pull pallets that won’t be affected by this policy. They’re generally more reliable in that there’s less damage and less fraud, but the margins are much lower since the pallets are higher cost.
The climate of liquidation is always changing, it’s important that we pay attention to changes like these and identify in what ways we can adjust are business to prepare for it when it hits us. We can’t control the policies of these major retailers, but as business owners, we can only control what we do. Keep an eye out for the unicorn return pallets, but make sure that you’re ready to look for other useful inventory on your behalf. If you’ve been exclusively buying return pallets for inventory, now is the time to start branching out and experimenting with other types of liquidation—lots, pallets, or otherwise.