Guide
How to value a load of returns
A load of customer returns is priced on three numbers: what share is salable, what the salable share will realize, and what it costs per unit to find out. Get the third wrong and the first two do not matter.
By The Retail Ledger · September 27, 2026
Grading
Most buyers work to internal grades: A for sealed or as-new, B for opened but complete and salable, C for damaged or incomplete but repairable, and salvage for the rest. The mix determines everything, and the mix is what the seller knows and the buyer usually does not.
Manifested loads narrow the uncertainty, which is why they cost more, as in liquidation auction mechanics.
The arithmetic
Expected value per unit is the sum across grades of the share in each grade times the realized price for that grade, minus the processing cost per unit, which is roughly constant regardless of grade. Because processing is fixed per unit, low-value categories need a much higher salable share to work at all.
A useful discipline: compute the break-even salable share at the offered price before bidding. If it is above what the category typically delivers, the price is wrong no matter how attractive the headline discount looks.
What buyers underestimate
Three things: the share of returns that are incomplete rather than damaged, the labor cost of testing and verifying, and the time it takes to move the C grade. The first two are direct costs; the third ties up capital and space that the A and B grades needed.
Questions
What is a salvage rate?
The share of a load that can be resold in some channel after grading, as opposed to being discarded.
Why does processing cost dominate low-value loads?
Because the cost of handling a unit is roughly the same whatever the unit is worth, so cheap categories need a much higher salable share.
Are manifested loads worth the premium?
Usually, because they convert an unpriceable uncertainty into a calculable one.
Related: returns processing economics.