Business is booming for companies who handle gift returns
CHICAGO — The holiday shopping season may be a distant memory, but with about $692 billion spent according to The National Retail Federation, a new business is booming for those companies that handle all the returns.
Companies like Shorewood Liquidators outside of Chicago.
In the weeks after Christmas, there is not an open shelf to be found.
“How many products are in the warehouse right now?” asked CBS News correspondent Laura Podesta.
“We have up to a million products in the warehouse right now,” replied Michael Ringelsten.
Every item in the warehouse is a return.
“This year alone we’ve already taken in over 600k products, which is a 23 percent increase from last year. It’s busy.”
It’s also lucrative. The majority of returns from major retailers like Amazon are handled by liquidators. The products are auctioned off at a deep discount online. Retailers are given a portion of the profits and the liquidators keep the rest.
“The reality is the size of the return business industry is bigger than most countries,” said chairman and CEO of Liquidity Services Inc. Bill Angrick said. “$300 billion a year of returned retail goods.”
It’s also a good deal for shoppers like Phillip Goldberg, who said he’s saved a ton bidding on these unwanted items.
“In total, hundreds of dollars. Although I’ve gotten a few lemons too. You’ve gotta look at both sides of the coin. It’s not a sure thing.”
There is a reason why people return products. Some are damaged, defective or missing parts. But others, maybe just weren’t the perfect gift.
Liquidators tell CBS News the most common items returned are electronics and household goods. Clothing and other apparel are usually not auctioned off, but returned to the original company.