Circularity challenges are emerging globally as our current production and consumption patterns are fundamentally flawed, prioritizing linear “take-make-waste” systems over sustainability. For example, the vast majority of materials entering the economy are virgin, while the share of secondary materials has steadily declined—from 9.1% in 2018 to just 7.2% in 2023—exacerbating the global waste crisis. For example, in countries like Ghana, electronic waste from developed nations fills landfills, creating toxic dumping grounds where young scavenge for scrap metal amidst harmful fumes. The fashion industry provides another striking example, with 87% of textiles being incinerated or dumped in landfills
annually—accounting for 7% of global landfill space—while less than 1% are recycled into new clothing.
Transitioning to Circular Systems
The relentless pursuit of economic growth has resulted in overproduction, resource depletion, and excessive waste, pushing ecosystems to a tipping point. Transitioning from a "take-make-waste" model
to circular systems would not be easy—it demands significant efforts and changes at multiple levels and
from all stakeholders. Achieving this shift requires a transformative mindset, as we cannot solve problems with the same thinking that created them in the first place. However, transformative change doesn’t always mean massive, time-intensive overhauls. It means taking action now, no matter how small, because the urgency cannot be overstated. Most of all, these efforts must be collaborative. By leveraging our collective strengths and fostering an ecosystem of change, we can ensure progress—no one can do it alone, if we have to take action now.
A truly circular economy must prioritize extending product lifecycles, starting with right-to-repair legislation and ethical production practices. Right-to-repair laws empower consumers to maintain and extend the usability of their products, reducing the demand for new goods. In Canada, the right to repair movement currently targets electronics like smartphones, computers, home appliances, and agricultural machinery. While not yet fully legislated, it aims to promote circularity by extending the life span of commodities and allowing consumers to repair products instead of discarding them. On the other hand, ethical production ensures that goods are made responsibly, with fair wages, safe working conditions, and sustainable resource use. Without these measures, circularity risks becoming a facade for the same exploitative systems that characterize linear economies. But what about the products already in circulation? Even if we were to stop producing new commodities today, we would still need to manage the existing ones to build true circular systems. For example, we have enough clothing to dress the next 6 generations of human race. This highlights the importance of addressing circularity failures within downstream supply chains - A stark example being, how retailers manage product returns and take backs. These returns not only represent logistical and financial challenges for retailers but also have a profound environmental impact. In the United States alone, approximately 8.4 billion pounds of returned goods end up in landfills annually, contributing to greenhouse gas emissions and the depletion of natural resources. However, hidden within this challenge lies an opportunity to redefine waste as a resource and to drive meaningful environmental, social, and economic change. By integrating reverse logistics with thrift infrastructures, the retail sector can take significant strides toward a sustainable future.
Understanding Reverse Logistics: Potential and Pitfalls
The scale of waste generated by retail is staggering. National Retail Federation estimated that retailers, globally, lost around $743 billion in 2023 due to returns which represented 14.5% to the total sales. While reverse logistics—the process of returning products from consumers to retailers or manufacturers—is often framed as a solution to recover value, it frequently falls short of sustainability goals. The transportation, storage, and handling of returned goods generate excessive emissions and inefficiencies, resulting in significant environmental, social, and economic impacts for all stakeholders.
Consequently, some retailers choose to send returns directly to landfills instead of reselling them, as it is often more cost-effective. A ReverseLogix study (2022) revealed that 80% of retailers face “significant to severe” return costs, driven by warehouse and equipment needs (10-30% return rates), transportation for “free” returns, labor for processing and customer service. Furthermore, these returns have a significant environmental impact, with billions of pounds of returned goods ending up in landfills each year, contributing to waste accumulation, greenhouse gas emissions, and resource depletion.
Thrift Infrastructures as One of the Solutions for Circularity
Despite its challenges, reverse logistics holds untapped potential when paired with thrift infrastructures. Traditionally criticized for inefficiency, reverse logistics can be transformed into a powerful tool for sustainability by rerouting returned and unsold goods to thrift stores or resale platforms instead of sending them back to warehouses or manufacturers. This shift reduces transportation emissions, extends product lifecycles, and contributes to a more circular economy.
The performance of the used goods market—valued at approximately $405.5 billion in 2023—proves it has evolved beyond its initial forecast as a sector reserved for consumers with limited disposable income. The market is projected to reach $1.3 trillion by 2031, growing at a healthy compound annual growth rate (CAGR) of 13.6%, according to a Transparency Market Research report. This marketplace is diverse, encompassing categories from apparel and furniture to electronics, automobiles, and beyond. Driven by increasing environmental concerns, net-zero awareness, and political pressure to reduce
waste and carbon footprints, consumers are embracing a more circular economy – 90% of consumers in Canada engage with thrift stores. Additionally, vintage, pre-owned, and retro products have seen a surge in popularity. Therefore, thrift infrastructures could play a critical role in addressing retail waste, including returns and unsold inventory. By reselling these items, thrift systems help keep products in circulation for as long as possible, divert waste from landfills, reduce the demand for raw materials, and lower emissions associated with the production of new items. Additionally, thrift organizations often reinvest their earnings into social impact programs, such as job training, employment services, and community development. This dual-purpose model creates shared value for society while addressing
pressing climate challenges.
Retailers in places like Canada are not legally obligated to manage returns (unless defective) or prepare their Environmental, Social, and Governance (ESG) reports, yet. However, many are responding by adopting solutions that enhance their brand reputation with customers and stakeholders. For example, Walmart’s national reusable bag recycling program in Canada illustrates this growing trend. Retailers can collaborate with thrift infrastructures to optimize shared logistics networks. By minimizing trips, utilizing existing community thrift infrastructures for storage and handling, and leveraging the sorting and grading expertise of thrift systems, retailers can reduce the emissions and environmental impact associated with transportation, infrastructure, energy consumption, and processing. These actions ensure goods are repurposed at scale while promoting sustainability.
Considerations of Ethical Practices
While it is essential to view thrift infrastructures as a means to promote sustainability, it is equally important to recognize the unfair tendencies within certain segments of the thrift industry. Some large thrift companies prioritize profit over sustainability and community impact, facing criticism for underpaying workers, inflating prices, and neglecting their environmental impact. Furthermore, the effectiveness of thrift infrastructures is constrained by the sheer volume of waste they are tasked with managing. Not all donated goods can be resold, and some commodities are either exported to developing countries or sent to local landfills. This trend of exporting goods to developing nations, initially started with the good intention to support local jobs and offer affordable products, is now contributing to a growing waste crisis. While some thrift infrastructures have begun exploring solutions for unsellable goods through recycling and innovation projects, the concept of environmental sustainability remains relatively new and dynamic. As a result, it will require time and collaboration from all stakeholders to transform these systems effectively. This underscores the need to design a concrete strategic frameworks for thrift-retail collaboration to manage waste (returns and excess inventory) , ensuring greater accountability, transparency, efficiency, and long-term sustainability.
Taking Insights from Trashie’s Case to Develop a Win-Win Strategic Framework for Thrift-Retail Collaboration for Managing Returns.
We can draw valuable lessons from various market cases to develop win-win strategies for thrift-retail collaboration. For example, Trashie’s case offers insight into how logistics and customer engagement can align to manage returns sustainably. Building on these insights, a strategic framework for thrift infrastructure-retail collaboration can be developed to manage returns effectively and sustainably. Trashie’s approach involves customers purchasing “Take Back Bags” to recycle unwanted clothing and other items, receiving vouchers in return. Retailers and thrift infrastructures can also design logistics systems to facilitate easy returns, promote the reuse of goods, and minimize waste. By creating affordable and collaborative take-back bags (e.g., $10) with guidelines for acceptable items, customers can purchase these bags at the retail store. The bags, prepaid for postage, would allow customers to return items to designated thrift infrastructure. Upon receipt, items would be sorted, graded, recycled, or repurposed by thrift infrastructures and retailers would be notified. After the receipt of notification, a corresponding reward in the form of dollars or loyalty points to be redeemed at the retail store. This collaboration would allow thrift infrastructures to process returns at scale, enhancing retailers' brand reputation and promoting the circular economy. The model could also incorporate revenue-sharing terms and conditions for items resold by the thrift infrastructures. Additionally, a collaborative digital system could be developed to track bags and their transaction points, ensuring greater transparency and efficiency throughout the process.
This article explores one facet of the issue i.e., the demand for a shift in how we view and manage the products already circulating within our systems. From addressing the challenges of waste and returns in the retail sector to ensuring ethical production practices, every step toward circularity is essential. Integrating thrift infrastructures with reverse logistics offers a promising solution, transforming what was once seen as waste into valuable resources that contribute to sustainability and economic growth.
However, the transition to a circular economy hinges on collaboration, innovation, and a commitment to responsible practices across all sectors—demanding a multifaceted approach that also encompasses reducing production and consumption. The time to act is now, and by embracing these changes, we can drive meaningful progress toward a sustainable future.
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