DALLAS — A lot of y’all didn’t like what you got for Christmas. We know because we have seen some of your returns. As we made our way recently through a Garland warehouse, we saw shelves and shelves of televisions, coffee makers, rugs, blankets, step ladders, a generator, a bathtub, couches, a collection of kayaks, and so much more.
The National Retail Federation reports that last year, Americans returned an estimated $743 Billion of merchandise.
Where does it all go?
When you send a product back to a store or online retailer these days, many of them don’t deal with it much after that. Instead, the merchandise often gets shipped off to huge warehouses like the one in Garland, where returns are sorted, tested, and re-sold in what has become an expansive secondary market.
The warehouse is one of eight warehouses run by Liquidity Services, which is just one return re-selling company. And just at their Garland location, they say they process a total of about 30,000 store and warranty returns monthly.
AllSurplusDeals General Manager Chad Messenger says, “It keeps growing year after year after year. It's a massive world that people just don't even realize or even understand. They bring something back and they just think it's going to go back…on a shelf and be done with. But they don't realize this is what happened.”
The ‘this’ he refers to is a huge collection of pallets that have been freshly unloaded from large transport trucks, “This just arrived today”. And more was on the way as we were talking with him. messenger had no clue what the next trucks would bring, either, "No idea, that's right”.
Post-Christmas is their busiest time of year, Messenger says, “Christmas returns are still coming in through the end of January”. Employees here know not to ask for time off around this time, “Yeah, that doesn't happen. Not in January.”
They are busy deciding what in the mountains of returns can be re-sold---or refurbished and then re-sold–so that the original retailer gets at least some money back, “We're giving our clients back a recovery…they wouldn't normally get”.
Bargain hunting for returned ‘steals’
On the other end of the deal, Messenger describes the offerings as, “A treasure hunt; everyone loves it”. Shoppers can search through and bid on items in online auctions that allow them to buy all kinds of items in small batches, by the pallet, or even by the truckload at what Messenger says are cut rate prices, “Anywhere from an 85 to 90% discount from the original MSRP (manufacturer’s suggested retail price).”
Liquidity Services has several 're-commerce' sites where overstock and returned items are re-sold in those online auctions. At liquidation.com, a multitude of products are sold wholesale in bulk. That includes televisions (many of which have been tested and assigned a letter grade, A being the highest). Another of their sites, secondipity.com, “higher-end consumer product” is auctioned. And at allsurplusdeals.com, shoppers can bid on a range of consumer items as well and then pick them up at the warehouse.
We saw a successful auction bidder picking up a whole load of televisions and putting them into a moving truck parked at a warehouse dock. Messenger explains, “You have people who are re-selling them. This might be a business that they run”. When we asked if people could make a living buying these returns in bulk and then reselling them, Messenger didn’t hesitate, “Yeah, absolutely!”.
He adds, “It's a great world to be in as far as having this opportunity to buy all different types of stuff, either in bulk or individual items. People show up with trucks and they'll buy hundreds of individual items, or they'll...buy the pallets of stuff and re-sell.”
A thousand returned TVs in the warehouse and probably MANY more soon to come…
As we toured the warehouse, we spotted row after row of televisions, with screen sizes all the way up to 100 inches. Messenger told us, “It's funny. We'll go to the back, too. You'll see the back is full.” The back of the warehouse was packed with televisions, except for a space up near the rafters. Messenger predicts that space will soon be filled with returned TVs as well.
Even though the company’s busy season is just after the Christmas holiday, Messenger says the number of televisions that arrive always spikes right after the Superbowl, because people buy a new set to watch the game, “And then it comes back to us again. Most of the time there's not anything (wrong with it). It's mostly all buyer's remorse.”
But is it just that? Or are a lot of people purposely buying nicer, larger TVs just to watch the game, intending all along to return them afterward? One report several years ago detailed how television returns routinely jump by 20% from the fourth quarter of one year through the first quarter of the next year (the Superbowl would be included in that timeframe).
That may be more ‘shady shopping’ than ‘buyer’s remorse’. Either way, those who work in the ‘re-commerce’ industry expect to be marking down and selling a lot of hardly watched televisions in the month ahead.
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