Liquidating merchandise

In the bankruptcy of bookstore chain Borders, for example, many people who failed to use their gift cards while the company liquidated were stuck with useless plastic after it was over.

Toys R Us said last week that it planned to honor its gift cards for the next 30 days."Use those gift cards ASAP," the Better Business Bureau said.

Make sure you understand your options before proceeding with a purchase.

For example, one retailer that recently liquidated, HHGregg, limited returns on items purchased during the liquidation to seven days and only on items "having a latent defect" that couldn't be "reasonably" identified by the buyer, according to a court filing.

This number is increasing largely due to the increase in online sales (which typically bring a higher return rate) and relaxed return policies to drive customer loyalty.

Lack of innovation over the past 50 years for dealing with consumer-returned and excess inventory is costing retailers billions of dollars, and can no longer be approached as an afterthought or left to inefficient traditional liquidation methods.

Retailers often hire liquidators that specialize in winding down operations.

Some cart in extra merchandise from other sources to supplement liquidation sales.

By implementing an efficient solution for returned and excess merchandise slated for liquidation, a company can meaningfully impact its overall operating margin.So, once merchandise is slated for liquidation, what are the best practices to implement in order to achieve maximum efficiency? Simply put, maximum efficiency means the highest possible recovery rate at any given level of asset utilization. The assets impacted by excess inventory can include employees, warehouse space and capital.Furthermore, what does maximum efficiency actually mean? Dealing with excess inventory can place demands in all these areas since people have to account for it, move it around a warehouse and figure out how to sell it.Liquidation sales can offer great deals to shoppers hunting for a bargain, but be careful.Toys R Us last week became the latest chain to announce that it will liquidate, selling or closing all of its U. stores, after it failed to successfully reorganize its operations in bankruptcy.There are questions you should ask yourself when implementing a solution for your excess merchandise either in-house or through a liquidation provider, including: Taking a look at some of the new approaches being used by other retailers with their excess inventory can also provide clarity and direction.

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