What happens to your Amazon returns? Sometimes, they go to the highest bidder

(NEXSTAR) – Amazon makes it easy to return something you don’t want, so you probably don’t think about what happens to that box once it leaves your house. It turns out that ill-fitting dress or unwanted frying pan — or whatever it is you decide not to keep — goes on a fascinating journey.

What is the fate of millions of Amazon returns? “Every item returned to Amazon is carefully inspected through a rigorous process by our trained Associates,” a spokesperson told Nexstar via email. “If it meets our high standards to be resold as new, it’s re-listed for sale.”

That’s the first and most obvious answer: It gets sold again. It’s also the most boring answer — because loads of returned merchandise end up finding a second life on the liquidation market, where they’re sold by the pallet at a deep discount.

Anyone willing to bid on a pallet of mystery goods can end up with a load of returned items shipped to their house. Whether or not there’s anything valuable in that delivery can turn out to be a mixed bag. There’s a whole sub-genre of YouTube content dedicated to bidding thousands of dollars on a pallet of Amazon returns, then unboxing them to tabulate if it was worth it, to see if the YouTuber’s gamble paid off.

Here’s how the whole process works. Sellers who use Amazon’s platform can opt to have returned items sent back to them — so they can figure out what to do with them — or they can choose to route their returns straight to liquidation, according to Amazon.

Before sending the returned items to a wholesale liquidator, Amazon says someone will inspect the products and put them in one of four categories: “Used – Like New, Used – Very Good, Used – Good, and Used – Acceptable.”

Sellers set the asking price for their used items, just like they do with new items, Amazon says.

From there, the items get repackaged into boxes — sometimes with similar things, sometimes with things nothing like them — and are up for sale again. But this time, they’re up for grabs to the highest bidder on places like Liquidation.com or bstock.com.

A recent search of the liquidation sites found a pallet of 432 “pharmacy” items — like nasal spray and contact solution — going for $776. (“A 88% savings!” the site claims, based on an estimated retail value of $6,964 for the 391-pound shipment.)

Another pallet of “health and beauty” items had an estimated retail value of $25,160. The highest bid when we checked was $2,601.

Each pallet comes with a manifest explaining the contents inside the shipment. But what it doesn’t tell you is the condition each item is in.

One YouTuber, Safiya Nygaard, spent $500 (after shipping) for a pallet of 50 miscellaneous health and beauty products. As she unboxed the shipment, she found some of the things were in good condition, like unused soaps, makeup and hair tools. But there was also a hairbrush (with hair in it) and a Waterpik teeth cleaner missing most of its key parts. Other items were just straight-up random, like a guitar case that was confusingly mixed in with the shipment.

Another YouTuber, who goes by the name HopeScope, paid $1,032 for a shipment of clothing with an estimated value over $9,000. She called it a “disaster” in her video, only keeping a small handful of the stuff she bought and donating the rest.

Others have tried to “flip” the pallets by reselling them for profit. But as Nygaard points out in her video, most of the items came used, which would make them hard to sell for their original retail value (at least in good conscience).

Amazon’s announcement of the liquidation resale program from 2021 estimated it would “give more than 300 million products a second life each year.” It’s not clear what portion of Amazon returns end up in these liquidation sales; the company declined to offer specific data on how many returns it processes annually due to “reasons of commercial sensitivity,” the spokesperson said.

Amazon also said it works with charities to donate “surplus products,” but didn’t specify how many of its returns end up as donations.

“If there are no other options for re-use or recycling (for example, due to legal or hygienic reasons, or because they are damaged), we send products for energy recovery — turning non-recyclable waste into usable sources of energy,” a spokesperson said.

What is energy recovery? It usually means they burn the stuff, CNBC explains. Energy recovery involves turning non-recyclables into heat or fuel by means of “combustion, gasification, pyrolization, anaerobic digestion and landfill gas recovery,” according to the Environmental Protection Agency.

An Amazon spokesperson called that option the company’s “last resort.”