Question: I’m thinking about making my first liquidation purchase, specifically customer returns from either Costco, Walmart, or I am having a hard time deciding which to choose from. Of the three mentioned, is one better than the other as far as overall damage ratios to expect?

Every pallet of customer returns will be different. You should not assume returns from any one store/source will be consistent, as far as damages are concerned. Having said that, there is something to be said for the source they originate from. From my experience talking with long time buyers of returns, they report dotcom loads have fewer damages overall when compared to traditional “store” returns. The overall condition quality of dotcom loads is correlated to the concept that orders are returned back to online retailers fairly quickly, without much item use if any use at all.

Costco customer returns tend to be clean and are well sought after within the liquidation industry. The only problem with Costco returns would be product mix;  pallets and truckloads of Costco may contain multiple categories of merchandise a salvage buyer may or may not be interested in, such as perishable food. Most liquidation buyers want the electronics and higher ticket items Costco offers, but struggle with grocery items. Many successful, long time buyers of Costco returns have developed a network of buyers who will take all bulk quantities of load  undesirables.

Walmart store return truckloads range across the board in terms of overall quality and percentage of damaged items. Walmart store return truckloads typically exhibit a higher damage percentage when compared to Walmart dotcom loads. Again, retail buyers who purchase online usually return items fairly quickly, hence the potential for cleaner returned merchandise.

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