Ecommerce News

What Happens to Returned Clothing Inside a Huge E-Commerce Warehouse


  • Americans will return more than $816 billion worth of merchandise in 2022, according to the NRF.
  • Apparel is a large source of e-commerce returns.
  • Shaving valuable time off clothing-returns processing is important to consumers and retailers.

Whether it’s because of the gift-giving guessing game or the growing practice of “bracketing” when shopping for clothes online, apparel is a massive source of e-commerce returns.

But the biggest problems are also often the biggest inspiration for innovation in the underdeveloped but fast-growing industry of “reverse logistics.” And returned apparel presents a particular problem: Though clothes and accessories don’t technically expire, the reality of fashion trends gives them a relatively short “shelf life” when they can be sold at full price.

Tobin Moore, the CEO of Optoro, a returns-management software company, told Insider that many returns take 30 to 45 days to make it back into inventory, even when they’re in perfect condition. That’s long enough for a trend to end or a new season to start, so restocking the item in full-price inventory doesn’t make sense.

“By the time it gets back to stock, a lot of it has to be marked down,” Moore said, often by 20% or 25%. “So retailers are investing in technology to get those goods back to stock immediately.”

Retailers have various systems for receiving, processing, and getting returns back into stock if they’re acceptable. And as e-commerce grows — and returns grow with it — speed is of the essence. It also often means consumers get their refunds quicker.

Speeding up returns — for both issuing refunds and restocking shelves — is the goal of technology companies like Optoro and returns-processing-center operators like Inmar Intelligence, which let Insider in its Pennsylvania warehouse to see how it all works.



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