There have been a number of high profile stories in the news lately about what happens to unsold items at stores, especially chain stores. Like reports on clothing chains which slash clothing and dump it in bags on street corners, bookstores which strip covers and dumpster unsold books, and so forth.
Anyone who has ever worked in retail would hardly be surprised by these stories. Hell, I’ll confess to having done some cover stripping in my day.[1. If you’re curious and don’t know what I’m talking about, distributors and publishers will not give credit for unsold mass paperbacks without “proof of destruction.” They usually don’t want these books returned (although they do accept trade paperbacks, hardcovers, etc for returns since they can be remaindered). “Proof of destruction” is conventionally done by stripping the cover off and mailing it back. Many bookstores then take those books and donate them to organizations like women’s shelters, since they are perfectly readable, they’re just missing covers. Others dumpster/pulp them. Anyway. As you were.] The fact is that not everything you order sells, although you can try very hard to move as much product as possible and to order wisely to minimize wastage. And once it’s been sitting around in a store for a while, the distributor usually doesn’t want it back. This is especially true with things like clothing which are only deemed saleable in a limited time period, like a season.
Hence. Retailers are left with unsold product and they need to get rid of it. What’s interesting to look at, though, is the way in which they get rid of product. Small businesses generally tend to donate it, taking a tax writeoff for the donated items or working out some other sort of arrangement. I’m a big fan of this method of disposal, for a number of different reasons.
The first is that many small organizations are really in need of donations, and they can benefit in a major way from being given free stuff. These groups can hand out donations to their clients, providing them with access to things they might not otherwise be able to have, and sometimes they can resell those items at thrift stores they run and so forth. Giving back to the community by helping out charitable groups is pretty much a good thing, in my book.
The second is that it’s environmentally friendly. The alternatives are return, if it’s accepted, which involves expending energy to package and ship the products, or dumpstering, which is just sad. There’s no reason to throw perfectly usable goods away, especially since most people are doing that already. Keeping usable durable goods out of landfills is a pretty great thing, even if you have to modify the goods in some way to get credit from the distributor for unsold products.
Third and final, I think that it creates a positive relationship with the community. If it’s known that a business tries to find local recipients of unsold products, it reinforces the idea that the business cares about the community and wants to be involved in community programs and projects. It’s always good to build up some credentials in the community, because you never know when they might come in handy. Especially in small communities, reputation really will make or break a business.
Larger businesses, primarily chains, tend to destroy/dumpster products they don’t sell. This is because it’s company policy. There are a variety of reasons why it might be company policy. For example, they might have a deal worked out with a distributor which says they get full credit for unsold goods, as long as they destroy them, and this is more advantageous than a tax writeoff for donating unsold goods. Or they might be worried about liability; if someone gets injured going through the free box, for example, they might sue, because, well, suing is what we do best here in the United States, it seems like.
Some of these companies really are interested in building good public relations. So it’s weird that they don’t use a clear opportunity for building relations because they’re worried about the bottom line and the bottom line says it’s better to shred winter jackets and dump them on a New York street corner than it is to donate those jackets to a homeless shelter.
How can we fix this? Clearly, we need to promote donation of unsold goods by incentivizing it, and finding a way to make it a natural choice for companies, especially chains. Maybe this requires leaning on distributors and parent companies to encourage changes in company policy. After all, if the distributor doesn’t care what happens to the product, as represented by the requirement of proof of destruction, then why should the distributor mind if the products are donated? Perhaps distributors could be convinced to accept receipts of donation as proof of disposal, and give a full credit that way, with a measure in place to prevent the company from using that donation receipt to also claim a tax deduction.
And perhaps companies could be reminded of the importance of public relations. It seems very peculiar to me that some companies will donate funds to communities with one hand while shredding unsold products with the other. Why not connect the loop there? Why not make donation of unsold products, whether or not there are financial benefits, part of a company’s overall charitable donations program?