The Hidden Costs Of Amazon Shipping And Returns

Buying and returning on Amazon may seem extremely easy, but that simplicity comes at a cost.

Amazon has more than 115,000 drivers working under independent small businesses - Delivery Service Partners, or DSPs - who deliver Prime packages to doorsteps with one-day shipping. This is a large part of how Amazon delivers packages so quickly. CNBC talked to current and former Amazon DSP drivers about the pressures of the job. From urinating in bottles to running stop signs, routes that lead drivers to run across traffic, dog bites and cameras recording inside vans at all times - some of the 115,000 DSP drivers have voiced big concerns.

But once you receive your Amazon order, if there's any reason you are on happy, more than likely it can be returned. Sending back an online order has never been easier. It’s often free for the customer, with some retailers even allowing customers to keep the item while offering a full refund. Amazon returns can be dropped off at Kohl’s, UPS or Whole Foods without boxing it up or even printing a label.

But there’s a darker side to the record number of returns flooding warehouses after the holidays.

“From all those returns, there’s now nearly 6 billion pounds of landfill waste generated a year and 16 million metric tons of carbon dioxide emissions as well,” said Tobin Moore, CEO of returns solution provider Optoro. “That’s the equivalent of the waste produced by 3.3 million Americans in a year.”

Moore says online purchases are at least three times more likely to be returned than items bought in a store. In 2021, a record $761 billion of merchandise was returned, according to estimates in a new report from the National Retail Federation. That report says 10.3% of those returns were fraudulent. Meanwhile, Amazon third-party sellers told CNBC they end up throwing away about a third of returned items.

At the head of the pack, Amazon has received mounting criticism over the destruction of millions of items. Now the e-commerce giant says it’s “working toward a goal of zero product disposal.” Last year, it launched new programs to give sellers like Clausen new options to resell returns, or send them to be auctioned off on the liquidation market.

This record number of online returns has created a booming $644 billion liquidation market. As supply chain backlogs cause shortages of new goods and Gen Z shoppers demand more sustainable retail options, pain points for one sector of retail are big business for another.

The nation's only major public liquidator, Liquidity Services, resells unclaimed mail, items left at TSA checkpoints, and outdated military vehicles. It also refurbishes highly sought after electronics, from noise-canceling headphones to the machines that make microchips.

SEGMENTS:
00:00 Amazon DSP Drivers Reveal The Challenges Of One-Day Shipping (June 2021)
24:19 Where Online Returns Really End Up And What Amazon Is Doing About It (January 2022)
40:49 How Liquidating Unwanted Goods Became A $644 Billion Business (February 2022)

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The Hidden Costs Of Amazon Shipping And Returns

[I_Cause_ConFLICKt]

My UPS driver seems to always have a smile on their face and greets me.
My Amazon driver looks like they're being chased at all times.

[jackgamble]

Shout out to all the Amazon Drivers out there!!! I appreciate your hard work, dedication, and all that you do to make deliveries happen for us!!! AAA+!!!

[kathyosborn]

It hurts to see how many returns are dumped in landfills when so many people are needing it. It’s really sad.

[kaydublin]

This made me appreciate the delivery ppl a whole lot more, thank you.😊

[DK-zutt]

If Amazon wants to reduce returns for clothing, force clothing manufacturers to stick to a standard size chart for the US market. If seller's clothes don't meet the size requirement, then they can't sell. Simple as that.
I know my measurements to a T because I sew. And I read the size charts, read the fabric content (so I understand the stretch of the fabric and/or shrinkage), look at every picture of other customers wearing the garment I am considering, then read ALL the reviews. I really appreciate other women who put their measurements in their reviews, because when that happens, I usually don't return my items. But after spending a considerable amount of time critiquing each item I am considering buying, if I order 5 skirts intending to keep them all, I still average returning 2-3 of the 5, which either don't fit at all (size chart is completely wrong, usually too big because the manufacturer did not account for fabric stretch or shirring), or the fabric is different or of very low quality than the item description (or the item description lied, like said the fabric was cotton and it's modal) or the fit is just ridiculously wrong (waist band of a dress sits on top of my boobs, or sleeves are too short/long/uneven or something ridiculous like that). I bet if they forced manufacturers to adhere to a set size chart, returns for clothing would drop in 6 months significantly, as people figured out how to make that size chart work for them. It's why the guy in the video said brick and mortar stores like Macy's, Kohls, JC Penney only have a 7% return rate....because people know how Kohl's "SO" brand, Penney's "St. John's Bay" Brand fit them, because it's fairly consistent and the size chart has been in use for years.

[hittrewweuy]

I really appreciate delivery drivers, they almost always bring my packages to my door and that for me is gold, thanks drivers

[ImDorkyGirl]

If I get bit by a dog, I’m not finishing anything, I’m attending to myself first, damn those packages!

[coffeecat]

I am so thankful for the r ability to return things. I have a little trouble getting items where I live and it’s very frustrating especially when you’ve ordered like $200 worth of stuff. I use Amazon for most of my shopping because being legally blind stores can be overwhelming for me since I have hearing loss as well and I have trouble hearing customer service agents, so I’m very appreciative of their policy. I wouldn’t use it for any other purpose but that or if I ordered the wrong size of some thing for my son, but yeah, they make it so easy to get things done and get the things I need for my son and my
house and myself.

While I do appreciate your service, they really need to work better with their workers. The way they are treated is ridiculous. And that should be a violation of honestly OSHA standards because if you can’t go to the bathroom, get food, and things like that it’s putting too much stress on the workers mentally, physically, and the health consequences should be enough that Amazon, as much as they make can do way better than they are.

[TheNumbaOneMiss]

I appreciate all delivery drivers. Thank you Amazon drivers if no one has told you lately. You're like real life Santas to me.

[ejfrmxc]

The engineers designing their routes should be made to actually do their routes in person for a week.

[KamionKing]

Man must be tough getting them boxes out. 😢 thank you all who make it happen, especially the drivers!

[BOOShawny]

I have never once returned a product. If it’s clothing that doesn’t fit, i just give it to a friend or family member, or i donate it. There’s always someone else who could use or need it.

[playtimewitheddy]

On the routes Amazon drivers get today.. their break and lunch times are not built into route and Return times. Essentially Amazon does not expect drivers to take breaks anymore. They hand you 400 total packages to deliver to over 200 homes and expect you to finish in 6-7 hours. Everything is a metric and measured. That's why you're now seeing a trend of unionization of major corporations because people have had it with the abuse and greed of these companies.

[dandantheideasman]

Working in industry, though not for Amazon as a driver, one thing they are missing is not giving the drivers regions of work.
UPS, DHL, FedEx, Royal Mail, - here in the UK - and the like give drivers regular routes to work. This enables the drivers to be familiar with the conditions of their environment, know when traffic is heavy in certain areas and learn short cuts that will save them time on their routes.
This knowledge is priceless and can only be achieved with drivers delivering to the same region, day in day out.
Also, having some way to feed back issues with the systems provided would be priceless and best if that system is delivered on a personal level, a member of staff at each location whom is responsible for acknowledging the feed back and then relaying it to those who can make the change.
Finally, having a portaloo/a camping toilet, like those found in campervans/Winnebago's is the obvious solution for the lack of facilities available and this should be applied industry wide. To support this, onsite cleaners can be on hand to clear this at the end of shifts, making the vans ready for the next shift - this should be standard.
Instead of chemical toilets, you could use compost toilets and then sell the biproduct to the fertilizer industry to support the facility of the toilets. That way it comes at little or no extra cost to the business, employees are happier in their work and you help facilitate the transition to the use of healthier fertilizer to grow crops for a more sustainable economy. A green touch that is on par with the ideology of Amazon and its founder Jeff Bezos.

[alexsteven.m]

.With inflation running at a four-decade high, a Recession is now the ‘most likely outcome for the economy. How can I grow my portfolio to outpace inflation and maintain a successful long-term strategy? I have been reading of investors making about $250k profit in this current crashing market, and I need ideas on how to achieve similar profits.

[leanette]

The same problem occurs with big box stores. If something doesn’t sell, it goes to the landfill. Returns, go to the landfill. So don’t just blame Amazon. We need to clean up the whole mess of big box, stores and companies like Amazon.

[Nyghtwolf]

I'm an amazon driver currently. Amazon has been saying forever that they are reducing stop count but what they actually do is just group houses that are close. Some times in groups of 3 or 4 houses with like 6 packages total and they count that as 1 stop. It's still doable but in Arizona in the summer it sorta sucks

[masaharumorimoto]

UPS gets my business whenever I can, they kick ass, my stuff always makes it on time, intact, and no issues with international shipments!

[willkillforbacon]

if amazon has cameras watching them and mentoring them then amazon should be held responsible since they have a hand in their behavior

[FakeAccount-dfny]

What they don't talk about, which is amazing to me, is that if something goes on sale on Amazon through the same seller and same item. If you ask for a price match they cannot, they tell you to return the item and reorder it, even if it's just for a few dollars. I bet you a lot of waste comes from this