Tuesday, March 09, 2010

The Island of Misfit Clothes...No More!

Where do unwanted clothes go? In light of the recent media attention about clothes dumping, a Wal-Mart employee opens up about her job that up until recently included this common industry practice.

In the classic Christmas movie, Rudolph the Red-Nosed Reindeer, the Island of Misfit Toys was a place where unwanted, rejected toys went to live. However, few know of the Island of Misfit Clothes. This is a place where unwanted, unsellable, and sometimes unfashionable clothes go to live, or more appropriately, go to get dumped.

Earlier this year, on January 5th, there was an article by Jim Dwyer in the New York Times that created a scandal for the Swedish retailer H&M, who sells women’s, men’s and children’s clothing. According to the article, discovered behind the 34th Street New York City H&M location, were garbage bags full of unworn clothes that were slashed. In the city that never sleeps, where poverty is prominent, this bag of unworn clothes could have provided warmth for many people during the cold winter nights. These garbage bags of clothes were first brought to attention by Cynthia Magnus who has not only found destroyed shoes, winter coats and gloves from H&M, but has also found bags of hole-punched clothes from a Wal-Mart supplier.

This article caused an uproar by consumers and a slew of bad publicity for both H&M and Wal-Mart. Even though both companies have addressed that this isn’t their usual practice and have taken actions to stop it, the question of whether these actions are happening close to home inevitably arises.

I recently had the opportunity to speak to an employee of a GTA Wal-Mart to find out if this was happening in our own neighborhood and if there were, if any, downsides to donating clothes. Marissa, whose name has been changed to protect identity, has been working the same Wal-Mart for almost 6 year as a Claims Associate and is aware of all the media attention regarding H&M and Wal-Mart. She describes to me what Wal-Mart does to unwanted merchandise and a very interesting recent change in policy.

So what is the Claims department responsible for?
Electronically adjusting on hand inventory counts, preparing, maintaining and organizing inventory, shrinkage, recalled and claimed item reports.

What do you do on a typical work day?
I process customer returns and “shop worn” items. These are items that are broken, destroyed or damaged in the store, items that have every day wear and tear, items customer brake, and have damaged packaging.

Where do these items come from?
Customer service sends down the customer returns and I process them and each department brings down their own shop worn and recalled items.

So what happens when the items come to you?
There are three different options available when items are brought down. First is Claim and Destroy. The vendor gives 100% credit for that item that is claimed or a predetermined percentage of the cost of the item is charged against its vendor. Then the item is destroyed at the store level

And by destroyed you mean thrown away?

Please continue.
The second option is Claim and Return: It’s the same as Claim and Destroy but we send the item back to the vendor. The last is called Markdown and these items are in the shopworn or damaged category. For the most part they are thrown away and are considered losses from profit

And apparel items, what happens to them?
They fall under the Markdown option.

How do you dispose the merchandise?
For the most part, 95% goes in to the garbage. We have our own compactor truck.

Do you know where the truck goes?
Probably to a land fill somewhere.

What doesn’t get thrown out?
All shoes, unless soiled, clothing, again unless soiled, hazardous materials like fireworks, batteries and paint.

What do you do with your clothes?
We donate them to the Salvation Army.

Is it just your store that donates to them?
I think all Wal-Mart stores donate to the Salvation Army.

What condition are these clothes in?
They are in good condition. Some of them are customer returns. Most of the time they are brand new but out of season or slow moving merchandise, stuff that we can’t sell.

Do you do anything to the clothes before you throw them out?
We cut off the tags and logos and cross out the names.
How about shoes?
Just our store is picked up by a local charity.

Has this practice changed over the duration of your time working for Wal-Mart?
Shoes were always donated to charity. Up until a year ago, we use to just throw out these clothes.

Only a year ago? That’s quite recent. What changed? Why did you start donating them?
There was just a sudden change in policy. I just got a memo.

Did they give a reason in the memo?
No. They never give a reason for anything (laughs).

Why do you think they started donating?
Well, it definitely started before the article came out about H&M clothes slashing. I think Wal-Mart was becoming more aware that throwing away the clothes that could be given to the less fortunate, was irresponsible and unethical.

You said your store has always donated shoes. Did you donate anything else before the policy change?
Previous years we’ve donated sleeping bags, hats, gloves that were out of season or not able to sell.

Is Wal-Mart losing money by donating these clothes?
I’m not sure what kind of tax credit Wal-Mart gets from donating to these charitable organizations, but they are not really losing out since under previous practices we just threw them out.

Do you think there’s a downside to this practice?
We are losing productivity because our associates spend time preparing the merchandise according to our policies so they can be donated.

What do you think of this policy change?
I think me and many of the other Wal-Mart associates are happier with the fact that the merchandise is being put to good use by those in need rather than them filling up a landfill.

Like Rudolph and his friends who try to save those from the Island of Misfit Toys, Wal-Mart continues to do the right thing by donating their unwanted clothes to needy charities. Here’s to hoping that other retailers will follow suit and that Island of Misfit Clothes turns out to eventually be just a fictional place.

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