What Happens to Customer Returns?

Customer returns are those items that consumers buy and later change their mind about keeping. Instead, they return them back to the shop, store or company. These goods are later restored to as much perfection as possible, and resold either as new products or as refurbished items. In the US, selling used items as new is against the law and considered a criminal act. But there are many stores and companies who choose to ignore this law. Those who fear lawsuits, sell customer returns to secondary markets or as open products. This in return, lowers the price of the item.

Return to Vendor

RTV or return to vendor is a system whereby goods are returned back to the vendors. These can be items that the customer doesn’t like or those that have some manufacturing fault. It is similar to customer returns in the sense that goods can be given back within a prescribed time frame. 

The difference between return to vendor and customer return is that RTV is mostly for large companies or organizations that make bulk purchase for some items. Customer returns, on the other hand, can be about individual customers as well as companies. The returned products are then either refurbished or sold off to the secondary markets for resale at a lower price.

Problems with Customer Returns

Of course, there are also many vendors or shops that do not follow return policies at all. The problem with this strategy, though, is that they run the risk of offending their regular customers who feel betrayed by the mistrust. Even the places which reject customer returns simply because a loyal client is unable to supply the receipt wound the feelings of their customers who feel cheated out of their rights.

The reason why so many stores either avoid or demand a receipt for customer returns is that many people take advantage of this policy and become involved in fraud. They think that if the store owner is foolish enough to take a used product back, then they are clever enough to continue their fraudulent practices.

There have been incidences where product manufacturers and retail shop owners have reported crimes of shoplifting and return of thoroughly used products, but nothing could be done as nothing could be proved. But to acquire returning customers, customer return is a must as it is an indication of good customer care services.

For many customers, though, there is now a nagging worry about what happens to products that they don’t like and return back. Is it prepped up and sold as before? Or is it identified as being a refurbished product that had been used once, however limited the time of its usage? What happens to customer returns? Here are the details for you.

Secondary Markets

Most customer returned items are sent to the secondary market, a place where refurbished or used products are sold. Prices aren’t the same as the price of the original products, which means that secondary markets attract a lot more customers since it suits their financial situation.

The secondary market also refers to the selling of used products between two parties, outside of the market. For example, if customer A bought an iPhone, but changed their mind about keeping it one week later, s/he can sell it off through some auction website or through advertisement on the internet to customer B. The used product would not reach any market and would be sold off privately. The trend for this kind of secondary market has risen in recent years with websites like eBay .

Refurbished Products

Another use of customer returns is the conversion into refurbished items or as an open product. This means that, although the item is not in brand new or mint condition, it has been restored to perfect condition and then resold. The customer is informed that the item is not brand new.

Many famous brand companies like Apple, Lenovo and Sony refurbish their products and sell them as ‘refurbs’. Many people who are unable to buy brand new versions get these refurbished ones instead. This has generally increased the market for refurbished electronic products, clothes, shoes, jewelry and various other accessories.

Sales Items

Many times customer returns are put on sale. Most shop keepers inform their customers about the product having some fault or being used briefly, but prices are lowered considerably. This way, people are more willing to risk buying the product feeling that it could turn out to be an investment. 

Some small second-hand shops or retail stores that sell used items are also likely to buy customer returns by the truckload, as their target market consists of people who have limited finances. These customer returns allow these people to be able to pick up brands like Apple, Hermes, Nike and Victoria’s Secrets etc.

Third World Countries

This has been a new strategy that many brands have adopted. When they receive customer returns, they check the item for expiry date and then ship it off to the retail market in less developed countries. This way not only is the product not wasted, it also gets recovery of material cost.

Charity

Mostly happening among bigger and well-known brands, many items that customers return are donated to charity. This way, customer returns are put into the hands of the needy. Famous brands like Gillette, Microsoft, Adobe, IBM, Sidney Stores, K-Mart and Eastman Kodak etc. commonly observe this donation practice.

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Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

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