CHICAGO (CBS) — The holiday shopping season might be a distant memory, but with about $692 billion spent according to the National Retail Federation, a new business is booming.
The companies that handle all the returns are doing quite well, and a lot of unwanted gifts end up in warehouses in the Chicago area.
In the weeks after Christmas, there is not an open shelf at Shorewood Liquidators near Joliet.
“We have up to a million products in the whole warehouse right now,” Shorewood Liquidators president Michael Ringelsten said.
Every item on the shelves is a return; like a refrigerator, an instrument case with the note “has a little crack on the top,” and one of the popular new instant pot pressure cookers still in its original packaging.
“In this year alone, we’ve already taken in over 600,000 products, which is a 23 percent increase from last year. So it’s busy,” Ringelsten said.
Returns also have been lucrative. The majority of returns from major retailers, like Amazon, are handled by liquidators like Shorewood. The products are auctioned off online at a deep discount. Retailers are given a portion of the profits, and the liquidators keep the rest.
“The reality is that the size of the returns industry is bigger than most countries. It’s $300 billion a year of retail returned goods,” said Bill Angrick, chairman and CEO of Liquidity Services Inc.
Returns shopper Phillip Goldberg said he’s saved a ton bidding on unwanted items returned after the holidays.
“In total, hundreds of dollars; although I’ve gotten a few lemons too. So I guess you’ve got to look at both sides of the coin. It’s not a sure thing,” he said.
There is a reason why people return products. Some are damaged, defective, or missing parts. Others maybe just weren’t the ideal gift.
Liquidators said the most common items returned are electronics and household goods. Clothing and other apparel usually are not auctioned off, but instead are returned to the original company.