A Guide to Buying Customer Returns
Customer returns are at an all time high: in 2017 around $400 billion in merchandise was returned. The spike in ecommerce is playing a huge role (around 30% of online purchases are sent back), as are increasingly relaxed return policies. The point is, returns are running rampant!
Over the past few years a shift has taken place in how retailers and manufacturers deal with their customer returns. Instead of putting them back on shelves or throwing them away, many are choosing to liquidate them. In fact the amount of customer-returned lots listed across B-Stock’s network of liquidation marketplaces (vs. shelf pulls/overstock) has steadily grown over the years.
Given there are more ‘customer-returned’ lots popping up, and the merchandise is sold as-is, we thought it was important to explain what – as a buyer – you can expect when sourcing this type of inventory.
Customer Returned = previously handled/shipped
An auction lot of customer returns means that the items have been previously purchased and potentially handled/used/worn; they may also have been damaged in transit. While some items will appear like new, typically, you can expect signs of use, ranging from light to heavy.
Look at the marketplace CONDITIONS section
Each of our client marketplaces has a dedicated CONDITIONS section that provides a detailed overview of what you can expect when purchasing customer-returned inventory. The CONDITIONS section is at the bottom of each marketplace page (scroll all the way to the bottom). Additionally, each auction manifest should contain information on the condition of the inventory.
Conditions of returned merchandise vary by retailer
Keep in mind condition codes vary depending on the retailer. For example, the Wayfair Liquidation Auctions marketplace has several Grades for its returned inventory, while Best Buy Liquidation Auctions separates by New Condition, Buyer’s Remorse, and Tested Working. Department Store Auctions groups all customer returned merchandise together; the condition and mix of goods will vary in each lot.
Dot Com and in-store returns aren’t created equal
Some retailers have begun to separate their customer-returned auction lots based on whether they were purchased online or in-store. Dot Com returns are typically in better condition that in-store returns: often the original packaging is intact or it may be brand new/unopened. There are a few reasons for this including the propensity of a consumer to order two or three styles of the same thing and send back the ones that don’t work or the item may have been shipped incorrectly/undelivered. (For more detailed information on all this, please check out our post: Why DOT COM Returns are Worth a Second Look).
There will always be a degree of uncertainty
Keep in mind, when purchasing customer-returns that have been marked for liquidation there will always be some risk involved. Be sure to familiarize yourself with how each retailer categorizes and groups its customer-returned lots. While each retailer works to provide as detailed an item manifest as possible, it’s important to do your due diligence.