by Disney Petit, CEO and Founder of LiquiDonate
“Closing the loop” is the retail industry’s favorite promise. Whether it’s designing biodegradable packaging, launching a resale site or committing to zero-waste manufacturing, brands are rushing to prove their circular credibility. But there is a massive and unglamorous bottleneck that most leaders are reluctant to address: Reverse logistics.
In the green rush, we have mastered the art of getting products has the consumer. However, we still cannot bring them back to scientific life. If you haven’t solved the backflow problem, your circular supply chain is not a circle. It’s a dead end.
Returned items are the “elephant in the room” of modern retail. Without a dedicated, cost-effective system to reintegrate these goods into the economy, even the most “sustainable” product is just future landfill fodder. Consumers assume that the new, perfectly usable items they return will be resold, but the truth is that up to 80% of these returns end up in a pile of trash.
Why “backward” is the new “forward”
Ignoring reverse logistics is not just an operational oversight; it’s a huge reputational and financial responsibility. We’ve all seen the headlines: luxury houses incinerate their unsold stocks or mountains of fast fashion accumulates in the Atacama Desert.
Consumers are paying attention. When a brand’s “circular” promise clashes with photos of its products in a landfill, brand loyalty evaporates. According to the National Institute of Standards and Technology (NIST), approximately 85% of used textiles in the United States end up in landfills or incinerators. Many of these items are perfectly functional.
Fixing the return pipeline isn’t just about “doing good” for the environment. It’s about protecting your brand’s credibility and your bottom line.
4 practical ways to “close the loop”
Here’s the good news: transforming your reverse logistics doesn’t require a total technology overhaul. This often requires a change of perspective and a little creativity. Here are four ways we’ve seen brands successfully come full circle:
1. Harness the power of proximity.
Early in my career, we discovered that retail warehouses and event planners could bypass massive disposal fees by simply sending usable products to local nonprofits. This led us to apply the same concept to returns per item.
- The lesson: Stop looking for a global solution to a local problem. Every populated area of the country has community organizations and schools in need of food, clothing, cosmetics and everything else. By keeping the movement “reverse” local, you reduce high per-item transportation costs and carbon footprint while building community goodwill.
2. Prioritize low-tech scalability.
In a technology-obsessed world, we often think we need a complex app to solve logistical problems. Sometimes the best solution is a cardboard box.
- The lesson: We have seen success sending prepaid physical donation boxes to retailers. Instead of a pile of returns that eventually ends up in the landfill, they simply fill them; we handle transit to non-profit organizations that have requested this specific category of items. It eliminates the friction of “warehouse purgatory” by making the right choice the easiest choice for field personnel.
3. Offer customers the “donation option.”
Why wait for a return to the warehouse to decide its fate? By integrating donation options directly into your digital returns management system, you empower the customer and don’t tarnish your brand.
- The lesson: When it comes to donations, many brands worry about their reputation and “donate” their high-quality products. The irony is that most consumers would increase their loyalty knowing that a brand is donating and would decrease it knowing that they are dumping perfectly usable, but unsellable items. A pair of cleats can go straight to a youth league; an upturned blender can go into a community kitchen. This completely bypasses the traditional “return to warehouse” route, saving time, money and emissions.
4. Find value in the “broken.”
Electronics and appliances are often thrown away due to minor defects. But “broken” is a relative term. Ask yourself if there is another use for a dented laptop or faulty radio.
- The lesson: If remodeling isn’t cost-effective for your brand, consider donating these items to trade schools or after-school programs. A box of non-working laptops is a gold mine for a computer hardware repair student. This is an investment in the next generation of the workforce rather than a contribution to the local landfill.
The circular economy will never develop thanks to marketing slogans alone. This requires the complicated and difficult work of managing returns, overstocks and unsold inventory. The human side of everything matters just as much as the technological side.
Brands investing in the “unglamorous” practice of reverse logistics aren’t just ticking a CSR box. They are building a resilient and credible business model that actually delivers on the promises they made to their customers.
Disney Petit is a social impact entrepreneur and CEO of LiquiDonatesoftware that integrates with any WMS or RMS to match unsaleable returns and excess inventory to nonprofits and schools. She was employee 15 at Postmates, where she built the Civic Labs team and won Time Magazine’s Invention of the Year award for the food safety product Bento.
