In-kind donations can help private customers resolve unwanted returns and inventory issues

By Paula DeJayes.

Generous return policies from companies like Target, Kohl’s and Walmart are popular with customers. Even though they generate goodwill and repeat business, retailers aren’t exactly happy when they have to rely on returned inventory. Now your retail customers are thinking about the unthinkable: giving customers refunds but giving them the option to keep their unwanted goods. But donating the goods is one way for retailers to deal with customer returns.

Returned products are a headache. They need to be checked and repackaged, which takes valuable time. Additionally, the retailer takes the risk that the product will not go out of style or expire before it can be resold. Most returns are unlikely to be able to be resold at full price, so even brand new merchandise can end up in a liquidation warehouse or the trash heap.

Instead of throwing away merchandise or selling it to a liquidation warehouse, where brand identity can be compromised, retailers have another option: donating in-kind items to a nonprofit organization. The resulting tax relief can be quite significant and may even be more financially beneficial than reselling the goods at a reduced price. It is called product philanthropy or donation in kind. Both the donor and the recipient benefit. Making your customers aware of this win-win situation could be news to them and an opportunity they will thank you for.

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Paula DeJayes is vice president of corporate relations at NAEIR (National Association for the Exchange of Industrial Resources), the largest in-kind fundraising organization in the country. The Illinois-based nonprofit has donated surplus inventory from more than 8,000 U.S. companies and distributed over $3 billion in products to nonprofits and schools.