In-Kind Donations Can Help Retail Clients Solve Unwanted Returns and Inventory

By Paula DeJayes.

Generous return policies by companies like Target, Kohl’s and Walmart are popular with customers. Though they generate goodwill and repeat business, retailers are not exactly happy to be stuck with returned inventory. Now, your client retailers are thinking the unthinkable: Giving customers refunds but letting them keep their unwanted goods. But, making a donation of the merchandise is one way retailers can deal with customers’ returns.

Returned products are a headache. They need to be inspected and repackaged, which takes valuable time. Plus, the retailer is taking a chance that the product won’t go out of style or expire before it can be resold. It’s unlikely most returns can be resold at full price, so even brand-new merchandise can end up at a liquidation warehouse or in the trash heap.

Rather than trashing merchandise or selling to a liquidation warehouse, where brand identity can be at risk, retailers have another option: Making in-kind donations to a nonprofit. The resulting tax break may be quite handsome, and it may even be more financially beneficial than reselling the merchandise at a cut-rate price. It’s known as product philanthropy or also as making an in-kind donation. Both the donor and the recipient benefit. Alerting your clients to this win-win situation could be news to them and an opportunity they will thank you for.

Paula DeJayes is vice president of corporate relations of NAEIR (National Association for the Exchange of Industrial Resources), the nation’s largest in-kind donation organization. The Illinois-based nonprofit has received donations of excess inventory from more than 8,000 U.S. corporations and redistributed more than $3 billion in products to non-profits and schools.

Small Business