What Can Retailers Do With Their Unwanted Merchandise?

Xin Lu — Fri, 08 Jan 2010 17:00:15 +0000

A recent New York Times article reported that retailers including H&M and Walmart have been destroying perfectly good clothes that were not sold and throwing them in the trash. This is a terrible waste, and it really saddened me to see that these stores did not even try to get rid of their unwanted merchandise in a more environmentally and socially friendly manner. Here are some of my suggestions, and I encourage you to add your own comments.

Donate

The new development is that H&M pledged to donate all unworn clothing. Usually companies that donate goods to charities can receive a tax deduction, but many do not do so because they are afraid of being sued by someone who gets hurt by the donated item. It does not take too much effort to drive a load of unused merchandise to a charity. I imagine intentionally destroy everything takes more work, and there is no tax deduction.

Free Rack

One way my parents got rid of unwanted junk was to leave it outside with a sign that says FREE. If retailers did this they will have many takers of their unwanted stuff. Some say that retailers are destroying goods instead of giving them out because they are afraid of fraudulent returns, but that is easy to remedy with a return policy that says no returns without receipt. A free rack probably attracts business, too.

Overstock and Liquidators

There are many companies that pay cash for overstock items, so there is no reason to destroy anything. Many stores like Ross and TJ Maxx sell overstock items purchased from other retailers. We also have Grocery Outlet for food items.

Give them to me

I would happily keep, give away, or sell any retailer's merchandise for them.

Unfortunately it seems that many corporations have policies that prefer destroying perfectly good merchandise over giving them away because they can write off the item as a loss and they do not have to worry about the liability of any harm the merchandise may cause. This may make sense as a business decision, but it is nevertheless incredibly wasteful. Ultimately, the retailers are in control of what they want to do with their merchandise, but there has got to be a better solution than simply destroying things people could use.

What do you think?

This article is from Xin Lu of Wise Bread, an award-winning personal finance and credit card comparison website. Read more great articles from Wise Bread: