What Does Walmart Do With Returns? An In-Depth Look
Returned purchases are a ubiquitous part of today‘s retail experience. But when we hand over our unwanted items to customer service, few of us ever wonder—what exactly does the retailer do with the returns?
As one of the world‘s top retailers, Walmart processes a staggering number of returns each year. In fact, statistics show that over 30% of items purchased online are sent back to Walmart, amounting to around 1.4 million ecommerce returns daily.
Handling millions of returns sustainably and cost-effectively is a complex task, but also a competitive advantage for retailers who can do it well. Here we‘ll take an in-depth look at what happens to your returns after you leave them with Walmart.
Breakdown of Walmart‘s Returns by Category
Walmart sells an enormous range of products across categories like clothing, electronics, home goods, toys, appliances, and grocery. The way each item is processed depends on factors like:
- Condition (new/used)
- Original packaging
- Ability to re-sell
- Food safety
Here‘s the typical pathway for some top-selling categories:
| Product Category | Condition | Handling |
|---|---|---|
| Electronics | New in box | Re-sold as open box |
| Clothing | Used | Resold via liquidators |
| Food | Opened | Destroyed |
| Furniture | Damaged | Recycled |
Routes for Returned Merchandise
Once you hand over your return, here are the main routes it can take:
Back on the Shelves
If still new and unopened, most items are simply put back in stock. Walmart will discount open-box returns before reselling them.
An estimated 15-20% of returned items can be resold through this channel.
Liquidation Companies
Lightly used returns and excess inventory are often sold via liquidators like Direct Liquidation. They purchase bulk pallets of Walmart returns and resell at heavily reduced prices.
Liquidators accounted for over $2 billion in Walmart return recoveries in 2022.
Donations
Walmart donates millions in unsold clearance items and returns every year. Food, home goods and apparel are donated locally when possible.
Walmart has pledged to donate over 1.5 billion meals through 2025.
Recycling and Destruction
Unsellable returns are either recycled or destroyed as a last resort. Food, hazardous items, and defective products must be discarded.
Walmart recycled 81% of returns and unsold items in 2020 to avoid landfill.
Cost Impact of Returns
Returns pose a major cost challenge for retailers. It‘s estimated Walmart spends $7 billion annually on return-related costs like transport, restocking, and liquidation losses.
Each return costs Walmart $70 on average to handle. Reducing return rates would significantly benefit Walmart‘s bottom line.
Innovations in Returns Processing
Walmart is continually optimizing its return process to increase automation, speed, and sustainability.
Instant refunds: Using Return Logic technology, some Walmart locations now offer instant refunds upon return, even without a receipt.
Re-commerce: Walmart resells millions of returned items via its website alongside regular inventory.
AI-powered decisions: Walmart uses artificial intelligence to determine optimal routing for maximum recovery of return value.
How Does Walmart Compare?
Walmart‘s return volumes are unmatched globally, but how do their processes compare?
| Retailer | Return Rate | Restocking |
|---|---|---|
| Amazon | 30% | More automated |
| Target | 10% | More resales |
| IKEA | 25% | More recycling |
While Amazon struggles with higher return rates overall, Walmart stands out for its massive re-commerce through stores, website, and liquidators. Their focus on recycling is also admirable.
Are Walmart‘s Efforts Making an Impact?
Walmart promises sustainability but some critics argue their return policies still encourage waste. Products returned due to buyer‘s remorse are often just scrapped.
However, strengthening donations, re-commerce, and recycling has allowed Walmart to keep over 80% of returned items out of landfills. Much progress is still needed but Walmart is moving in a greener direction.
How Can You Return Sustainably?
As customers, we can also minimize the footprint of our returns:
Avoid "wardrobing" – buying then returning used clothes after wearing once. This often renders them unresellable.
Hold onto receipts and original packaging to maximize resale potential.
Return early before items depreciate in condition and value.
Consider keeping and donating locally rather than returning non-perishable items.
Be reasonable about what you return – don‘t buy items you may not actually need.
The Bottom Line
Returns are simply part of doing business for Walmart. While the process largely happens behind the scenes, we as customers can rest assured our returns are handled sustainably and ethically. Walmart recovers value where possible by reselling, donating, and recycling returns.
By returning mindfully and minimizing needless waste, we can partner with Walmart to create a greener, more circular retail economy.
