It’s safe to say that online shoppers like the promise of easy — and even better, free — returns. But it may surprise consumers to learn what can actually happen to all those unwanted items.
A Marketplace investigation into Amazon Canada has found that perfectly good items are being liquidated by the truckload — and even destroyed or sent to landfill. Experts say hundreds of thousands of returns don’t end up back on the e-commerce giant’s website for resale, as customers might think.
Marketplace journalists posing as potential new clients went undercover for a tour at a Toronto e-waste recycling and product destruction facility with hidden cameras. During that meeting, a representative revealed they get “tons and tons of Amazon returns,” and that every week their facility breaks apart and shreds at least one tractor-trailer load of Amazon returns, sometimes even up to three to five truckloads.
“We’re not the only ones. We couldn’t handle all of Amazon. There’s no way. It is so — it’s like cockroaches, it multiplies. It’s incredible,” said the operations manager.
CBC News is concealing her identity because both this company and others that help Amazon dispose of or resell its online returns are afraid they’ll lose their contracts if they speak publicly.
“Some of it will go into landfill,” said the operations manager. “Like, nothing 100 per cent goes into recycling. It just is not possible.”
WATCH | CBC Marketplace found out where some Amazon returns really go:
Hidden cameras and secret GPS trackers reveal that some products sent back to Amazon Canada are being liquidated by the truckload and even destroyed or sent to the landfill. 11:27
Eco-blogger Meera Jain was extremely disappointed to learn about how some Amazon returns are being shredded for recycling, or sent to landfill.
“Our recycling system, not only in Canada but around the world, is extremely, extremely broken,” Jain said.
“We could resell, we could re-gift, we could re-home somehow or reuse it somehow. That would be way preferable to recycling.”
Eco-blogger Meera Jain was extremely disappointed that some Amazon returns are being shredded for recycling, or sent to landfill. She worries about the environmental impact of online shopping. (Norm Arnold/CBC)
Jain likes the convenience of online shopping but worries about Amazon’s carbon footprint. She started buying more on the platform after the coronavirus pandemic hit, and she’s not alone.
Kevin Lyons, an associate professor at Rutgers University in New Jersey who specializes in supply chain management and environmental policy, says that 30 to 40 per cent of all online purchases are sent back. That number drops to less than ten per cent for merchandise bought at bricks and mortar stores.
To further investigate where all those online returns end up, Marketplace purchased a dozen products off Amazon’s website — a faux leather backpack, overalls, a printer, coffee maker, a small tent, children’s toys and a few other household items — and sent each back to Amazon just as they were received but with a GPS tracker hidden inside.
A Marketplace investigation into Amazon returns found that some of them don’t make it back to the company’s virtual shelves at all. (Norm Arnold/CBC)
Marketplace teamed up with the Basel Action Network, a non-profit Seattle-based environmental organization that specializes in tracking waste and harmful products around the world. The trackers became a guide into the secretive world of e-commerce returns.
Many returns took a circuitous route, often covering several hundreds — sometimes even thousands — of kilometres to reach their final destination. Marketplace returned toy blocks that travelled over 950 kilometres before reaching a new customer in Quebec. And a printer clocked over 1,000 kilometres while circling around southern Ontario.
Of the 12 items returned, it appears only four were resold by Amazon to new customers at the time this story was published. Months on from the investigation, some returns were still in Amazon warehouses or in transit, while a few travelled to some unexpected destinations, including a backpack that Amazon sent to landfill.
Marketplace producers purchased a backpack just like this one on Amazon, and returned it in brand-new condition with a hidden tracker inside. Within three weeks it ended up at a waste management facility in Etobicoke, Ont. Amazon says it arrived damaged. (CBC)
The backpack that Marketplace returned in brand-new condition — but with a tracker inside — can be traced directly from the Amazon warehouse in Mississauga, Ont., to a waste management facility in Toronto.
When Marketplace took Amazon shoppers to that facility, they were surprised by what they heard.
Magida El Timani often shops on Amazon and was shocked to learn that the giant online retailer tossed out a backpack returned by Marketplace producers. (Norm Arnold/CBC)
“I’m just truly shocked by that,” said Magida El Timani, who shops frequently on Amazon. “I would want that bag.”
She says Amazon’s decision to throw out the returned backpack makes her re-evaluate where she does her shopping. “I just truly have so many questions … for everybody at that company. It does make you rethink shopping at Amazon.”
Marketplace producers returned the backpack in brand-new condition and filmed it on camera. Amazon says the handbag arrived damaged and could not be resold.
But the problem is much bigger than one backpack.
Optoro, a technology company that specializes in streamlining reverse logistics — the process of sorting through retail returns — estimates that $400 billion US worth of merchandise is returned to all retailers every year, which generates five billion pounds of waste directed to landfill in the U.S.
Although the Retail Council of Canada does not have specific metrics for Canada, it points out that items sold online have higher returns than bricks and mortar stores, and says those returns need to be managed carefully.
Marketplace bought a truckload of Amazon returns
Amazon does sell returned merchandise on its website via a platform called Amazon Warehouse. Amazon returns are also sold by liquidators — large pallets or single items can be purchased online by the public through virtual auctions.
Marketplace journalists purchased three skids of Amazon returns at one of these auctions, and then asked a veteran liquidator to assess their value.
Roy Dirnbeck, who has been in the liquidation business for 27 years and has several stores across the country, says he regularly sees tractor trailer loads of online returns.
Kevin Lyons is an associate professor at Rutgers University in New Jersey who specializes in supply chain management and environmental policy. He says that 30 to 40 per cent of all online purchases are sent back. (Steven D’Souza/CBC )
“They can’t keep up with the returns, so they just find fast ways to sell it by the skid, the truckload, trailer load — whatever,” says Dirnbeck.
He says the pallets usually display well-known products on the outside, and will often contain more “junk” on the inside.
WATCH | Why free online returns are terrible for the environment:
Between 30 and 40 per cent of all online purchases are sent back. You may not realize it, but those returns are actually costing the environment, one expert says. 0:42
While Dirnbeck attempts to sell or donate as many products as possible, he worries about how much ends up in landfills.
Lyons, the Rutgers professor, thinks Amazon needs to be more transparent with its customers.
“So you don’t get a sale price or you don’t get a receipt for it, but the earth is actually paying the price for this,” he says. “If you think about the millions and sometimes billions of transactions that are happening on this space, the impact is incredible.”
Roy Dirnbeck has been in the liquidation business for 27 years and has several stores across the country. He helped Marketplace journalists sort through the Amazon returns bought online from a third-party auction. He says the returns behind him are unsellable and could end up in the garbage (Anu Singh/CBC)
It’s a problem that plagues all e-commerce giants, not just Amazon.
Amazon, however, did write the playbook on free returns, says Jason Goldberg, chief commerce strategy officer at Publicis Groupe, a global marketing and advertising agency.
The tactic of enticing customers to buy more than they need and return what they don’t want “has had tragic repercussions for the environment and business,” he says.
“It’s very difficult and expensive to effectively process product returns” for all e-commerce retailers, says Goldberg. “You’re lucky if half of all returns can still be sold as new, so a huge amount of merchandise has to be dispositioned via some other means — liquidation, refurbishment, recycling, or landfill.”
In Amazon Canada’s business agreement with companies that sell on the site, third-party sellers are given just two options when customers return their product: either pay a fee to have it shipped back to them, or pay Amazon to choose how to dispose of the return by selling, recycling, donating or destroying it.
Until recently, the option to have the item shipped back to the seller was three times more expensive than letting Amazon deal with the return. Amazon tells Marketplace that from Sept. 1, those two fees are now the same.
Amazon’s senior public relations manager Alyssa Bronikowski said in a statement that Marketplace‘s investigation is inconsistent with the company’s findings.
“A vast majority of excess and returned inventory is resold to other customers or liquidators, returned to suppliers, or donated to charitable organizations, depending on the condition of the item,” Bronikowski said. “On occasion we’re unable to resell, donate or recycle products — for safety or hygiene reasons, for example — but we’re working hard to drive the number of times this happens down to zero.”
Marketplace asked Amazon what percentage of its returns are sent to landfill, recycling or for destruction. The company wouldn’t answer.
A television investigation in France exposed that hundreds of thousands of products — both returns and overstock — are being thrown out by Amazon. As a result of public outcry, a new French anti-waste law passed earlier this year will force all retailers including e-giants like Amazon to recycle or donate all returned or unused merchandise.
Shortly after the show aired in 2019, Amazon also introduced a new program in the U.S. and U.K. known as Fulfillment by Amazon Donations, which Amazon says will help sellers send returns directly to charities instead of disposing of them.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
