Return warehouses sell new merchandise at deep discount

Ever wonder what happens with all those returns Americans make? A new trend now lets you buy those items for pennies on the dollar.
Posted at 6:48 AM, Mar 31, 2023

At a time when inflation is pushing some prices higher and higher, we are all looking to save money on items for our homes or gifts for other people.

One new trend is return and overstock warehouses.

Some savvy shoppers are saving money there by purchasing returned items that are too expensive for stores to restock. So instead, people are buying them for pennies on the dollar.

Meredith Diggs oversees a warehouse filled with bargains at All Surplus Deals, part of a growing trend of surplus stores.

Diggs showed us some of their thousands of items for sale, including brand-new air fryers, Lego sets, a Bowflex, and a ride-on Mario Kart vehicle, all selling for a fraction of the original price.

"These might be somebody returned something because it didn't work for them, but it might be right for you," Diggs said.

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So how are deals and steals like these even possible?

Vanderbilt University marketing professor Kelly Goldsmith says in many cases, retailers are looking for new ways to offload an increasing number of returned items.

"Consumers are becoming more cautious about what they keep," she said. "They're not becoming more cautious about what they buy. They're becoming more cautious about what they keep!"

In 2022, shoppers returned over 16% of the items they bought.

And returns tend to be even higher when shoppers buy online.

"What that means is that they end with a lot of kind of half-used, half-open, no box item, but the parts are there," Goldsmith said. "And they need to get rid of."

With some of these warehouses, you visit in person. At All Surplus Deals, you place bids in an online auction, then pick it up if you win.

"On the website, we're going to tell you that it is assembled, that it is not damaged," Diggs said.

Some lucky teen will get a powered hoverboard the warehouse was selling, with Christmas wrapping paper still attached.

"It's a $150 item and will probably go for about $50," she said.

All Surplus Deals is currently operating in Phoenix and Cincinnati, with more stores planned, though there are others like it in many cities.