Why turning refunds into donations is a win for everyone
Samir Kamnani
·February 18, 2025
Returned products are a leading contributor to environmental waste.
Often, retailers send their returned products off to landfills because they can’t be resold at a profit, so they write off their losses and get rid of the products as efficiently as possible. In fact, in 2022 alone, close to 10 billion tons of returns ended up in landfills, creating 24 million metric tons of CO2 emissions.
Fortunately, some merchants are choosing a more sustainable path for their reverse logistics, and we hope that others will soon follow suit.
By choosing to donate your returned products, you can ensure a useful second life for your products and reduce the negative environmental impact of returns. It’s also a smart marketing strategy: In fact, 80% of Americans say that they’d consider switching brands based on their support of a charitable cause.
Let’s look at how your brand can build a purposeful path for your returned goods.
Choose a partner organization
When putting a donation program in place, it’s important to find a partner that shares your values and can efficiently distribute your donated goods. You might choose to partner directly with a nonprofit organization in your region, or you could consider working with a network that identifies and passes on items to organizations in need. Make sure that you have a good sense of the organization’s needs and capacity to take in donations before making a commitment to work together.
For instance, Brooklinen partners with Good360, a national network that consolidates Brooklinen’s returned bedding products and sorts them for distribution to homeless shelters and domestic violence survivors’ shelters across the country.
And at Allbirds, new or lightly used returns are donated to the brand’s donation partner, Soles4Souls, which distributes them to people in need.
Set up a recycling program
Unfortunately, reverse logistics aren’t cut-and-dried. Some charitable partners will only accept new, unworn items, so it’s important to have a backup plan for items that don’t qualify.
In addition to identifying a charitable partner, building a recycling program can also be a great way to repurpose used products, especially since not all of your returned products will meet your partners’ needs. You can even encourage your customers to send in their worn-out items (whether they’re from your brand or not) for recycling in exchange for a credit, as Bombas does with its Take Back Bag program in partnership with Trashie. Customers who purchase a $10 bag can fill it with all of their unwanted socks, underwear and other clothing items, which will be sorted and recycled. Upon receipt of the items, the customer will get a $10 credit towards Bombas purchases.
The importance of sustainable returns
Learn why sustainable returns matter to customers and what to do
Learn moreEducate your consumers
By promoting your donation program, you’ll be able to win goodwill from new and existing customers, and help put your nonprofit partners in the spotlight. Showcase key metrics from your donation program, such as how many products you were able to donate to charity and keep out of landfills. You can calculate the value of your program in both financial (cost of goods) and environmental (carbon impact) terms. By showcasing your donation program, you’ll be able to demonstrate your commitment to sustainable policies and win over ethically-minded consumers.
Get a tax deduction
Don’t forget that whether you discard or donate products, you’re entitled to a tax deduction based on their value. If you’re partnering with a nonprofit, you should be able to get a tax receipt from them for the value of the donated goods, which you can write off against your profits, helping you save on your tax bill.
Automate your reverse logistics
When a customer requests a return, you need the data to know how to handle it. While some returned products can be restocked and resold, others should be donated, and still others are better suited to your recycling program. So how do you decide what to do in each situation?
By using Loop’s Workflows, you can ask your shoppers questions about why they’re returning a product and what condition it’s in, which will help you choose the right final destination. Additionally, you can take advantage of our integration with Two Boxes, which will give you better visibility into the condition of your returned products when they’re received by your 3PL. By setting up customized workflows to manage your returns based on item category and condition, you’ll be able to route returned products to the right destination, whether that’s your warehouse, your donation partner, or a recycling facility.
You can also use our versatile reverse shipping options to reduce your return shipping costs. For instance, our partnership with Happy Returns enables your customers to bring their unboxed items to a Return Bar in their local area for a refund. From there, returned items can be inspected, sorted, and consolidated for shipping, whether they’re destined for inventory or donation. You’ll be able to save money on packing and shipping by taking advantage of bulk shipping rates.
And don’t forget about our “Keep Item” feature. There are some returns that won’t be a fit for restocking, donation, or recycling—but rather than sending those products to a landfill, simply let the customer hold on to them while processing their refund. By allowing them to keep the item, they can safely dispose of the product themselves, without adding extra cost or carbon footprint for reverse shipping to your warehouse.
By building customized return policies that take each product’s lifecycle into account, you’ll be able to set up a strategy that’s both environmentally-friendly and cost-efficient for each product return, with automated workflows that don’t rely on your CX team. With our best-in-class returns management technology, you’ll be able to make your brand more sustainable in every way.
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