How Amazon plans to set the issue of its huge return
Key takeaways:
- Amazon manages a rapidly increasing number of returns, causing a massive issue for the e-commerce giant and the world.
- A National Retail Federation survey found a record $761 billion of merchandise was returned to dealers in 2021.
- That part exceeds what the U.S. spent on national defense in 2021, $741 billion.
Amazon wouldn’t share its overall returns digits. Still, in 2021, the National Retail Federation counts 16.6% of all products sold during the vacation season as returned, up almost 56%. For online buys, the average rate of return was even increased to about 21%, up from 18% in 2020. With $469 billion of net sales gain last year, Amazon’s returns numerals are probably staggering.
U.S. returns cause 16 million metric tons of carbon emissions during their difficult reverse travel and up to 5.8 billion pounds of landfill waste per year, according to returns solution provider Optoro.
“We’re talking regarding billions, billions, and billions of [dollars of] waste that’s a byproduct of consumerism run amuck,” stated Mark Cohen, director of retail analyses at Columbia Business School and ex CEO of Sears Canada.
“The reverse logistics are still going to be bad because the merchandise, in most circumstances, cannot be resold as it was initially,” Cohen stated. “The most suitable way is into a dumpster, into a landfill.”
Amazon has revealed to CNBC it ships no items to landfills but depends on “energy recovery” as a last resort.
“Energy recovery denotes you burn something to create heat and energy. And you explain the disposal of goods as a transformation from one state of matter to another,” Cohen said. “To the degree they’re doing that; I don’t think they fully disclose.”
Amazon has said it is “working towards a plan of zero product disposal,” although it wouldn’t put a target date for reaching that goal.