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Depending on what retailers do with holiday returns and overstock inventory—to the degree that they touch it, sort it, triage it, refurbish it, recycle it, resell it—the associated costs of the reverse supply chain can add up quickly. “It’s expected that roughly 10 percent of purchases will end up being returned, so the estimates that I’ve read is that will translate into $70 billion worth of retail sales, which just get reversed. The impact is enormous. With 10 percent of your sales coming back, it’s not just running the register backwards, but the cost associated with handling all that product coming back,” according to Howard Rosenberg, CEO and co-founder of B-Stock Solutions.
There are several ways a retailer can try to recoup value from the gift returns and overstock inventory that tend to accumulate immediately after the holidays: resale to another consumer (in some cases including reconditioning and/or refurbishment), resale in bulk on the secondary market, donation and recycling. Destruction is another option for retailers, although no value is recouped, but further reduced.