The Robin Report blog quotes Newmine
Check out the blog, “Fewer Than Half of Returned Goods Are Resold at Full Price: Here’s Why,” for more information about returns reduction and returns management.
The most effective way to recoup margins on returned inventory is to resell for full price whenever possible. Since 75 percent of returns are shipped back to the retailer, and many retailers offer free returns as part of their value proposition, retailers lose money on shipping (twice) for every returned item that they aren’t able to resell. But there’s a lot more to reselling returned inventory than meets the eye. Newmine describes the unexpected costs of reselling inventory: “Items that need refurbishing or remanufacturing consume materials and, notably, time – which could make the product obsolete before it’s ready for sale again. Most products need to undergo inspection, repair, replacement of defective parts and repackaging.”
Retailers that recirculate products through a warehouse for inspection and repacking risk the returned product going out of style, expiring, or the season changing before that product can be resold at one of their stores. This is what makes returns so tricky and it’s why it is so unlikely that many of the returns that can be resold will be sold at full price.