"They're going to do it for their own self-interests, although they'll couch it in the name of saving the planet," Cohen said. Returns factor into these costs, so anything Amazon can do to lower those costs will help the company's bottom line. But now you, as a consumer, what do I do with this thing, right?"Īmazon now has to solve the problem of what to do with returns on the back end.Īmazon spent nearly $152 billion on logistics in 2021 - nearly a third of all net sales. "Let's let the people keep it and then it doesn't count against us. "If I tell you to keep the product, instead of counting the cost and the carbon effect of taking it back, I look better as a company, don't I?" said Tony Sciarrotta, executive director of the Reverse Logistics Association. On the extreme end of easy returns, Amazon is increasingly allowing customers to keep some "returned" items while still refunding them. There's a Try Before You Buy program for Prime members designed to make returns for clothes even easier, with return labels already included in the box. "It creates loyalty to the brand, makes you more likely to sign up for Prime, and Prime is really the thing that drives the flywheel of that company."Īmazon now allows returns at 18,000 locations, including the option to drop off items without a box or label at Kohl's, UPS and some Whole Foods stores. "So now you have your more traditional retailers like Walmart or Target sort of implementing similar policies because that's a really big piece of how you compete on the retail side of it," he said. "Amazon has really been a game changer in the reverse logistics world because of how easy their returns are," said Zac Rogers, who ran returns for an Amazon subsidiary called Quidsi from 2010 to 2012 before he became an assistant professor of supply chain management at Colorado State University. In 2019, Amazon expanded free, easy returns to millions of items. Researchers have found that consumers love easy returns.Īn often-cited 2018 survey of 1,300 online shoppers found 96% would come back to a retailer if they had a good returns experience, and 69% were deterred from buying if they knew they'd have to pay for return shipping. She said the goal of zero product disposal was something they talked about at Amazon for many years. They are resold as new and used, or they go back to the seller or supplier, or we donate them," Armour said.Įnergy recovery, Armour added, is only for "items that we can't recover or are not recyclable" due to legal or hygienic reasons or product damage.Īrmour first joined Amazon 12 years ago, starting as a night shift operations manager at a fulfillment center in Indianapolis. "And that comes in the form of selling the majority of the items that we do receive. "We encourage a second life on all of the products that we receive back," said Cherris Armour, Amazon's head of North American returns in an exclusive interview with CNBC. "To the degree they're doing that I don't think they fully reveal."Īmazon has said it is "working towards a goal of zero product disposal," although it wouldn't set a target date for reaching that goal. And you rationalize the disposal of goods as a conversion from one form of matter to another," Cohen said. "Energy recovery means you burn something to produce heat, to produce energy. "The most expedient pathway is into a dumpster, into a landfill."Īmazon has told CNBC it sends no items to landfills but relies on "energy recovery" as a last resort. "The reverse logistics are always going to be nasty because the merchandise, in most cases, cannot be resold as it was originally," Cohen said. "We're talking about billions, billions, and billions of waste that's a byproduct of consumerism run amok," said Mark Cohen, director of retail studies at Columbia Business School and former CEO of Sears Canada. returns generate 16 million metric tons of carbon emissions during their complicated reverse journey and up to 5.8 billion pounds of landfill waste each year, according to returns solution provider Optoro. With $469 billion of net sales revenue last year, Amazon's returns numbers are likely staggering. For online purchases, the average rate of return was even higher, at nearly 21%, up from 18% in 2020.
Personal Loans for 670 Credit Score or LowerĪmazon wouldn't share its overall returns numbers, but in 2021, the National Retail Federation estimates 16.6% of all merchandise sold during the holiday season was returned, up more than 56% from the year before. Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit
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