Unexpected way to make money: Couple buys returns from Amazon, Walmart and Target and resells them

In December 2020, Jamie and Sarah McCauley faced one of the strangest ways to make money. The couple bought items that people returned to Amazon, Walmart and Target and made money reselling them. Read more about this publication CNBC.

Photo: IStock

The couple, who remodel furniture, renovate and rent properties in Michigan, first saw a distributor selling boxed returns on a Facebook group. The process seemed simple: interested parties would visit a local warehouse and pay an average of $550 for a huge pallet of return boxes.

Warning: You don't know what items are in the boxes and what condition they are in.

Jamie, 33, and Sarah, 32, estimated they spent about $7 on returns from Amazon, Walmart and Target.

By reselling the items in the boxes on eBay and Facebook Marketplace, they said they made about $19 in profits. For example, from one box for $500, 525 items were listed on Amazon, which together cost $25.

“It actually started as an experiment to see if it was possible to make good money this way if you treat it like a business,” Sarah explained. “At first we did it for fun, and then we realized that this is a really great way to earn decent money.”

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But buying returns, the couple warns, is a gamble. Let's say Amazon's profitable box had 19 items that still haven't sold. Among them are some items that are too damaged to even be put up for sale.

How it works

After selecting a returns pallet, Jamie and Sarah load the boxes from it onto a trailer behind the pickup truck, drive them home, and film them unpacking content for their YouTube channel.

As they unpack for their 109 subscribers, they estimate the retail value of each product based on its list price and condition. Most of the items are in good condition, which means that McCauley usually lists them for resale for around 000% of their original price.

Jamie says it usually takes one to two weeks to recoup the money and four to eight weeks to sell 90% of the goods. Remarkably, they never lost money on returns.

"We've had really bad boxes, but we're always at least breaking even," he remarked.

McCauley is not alone. Dozens of YouTube and social media accounts are dedicated to tips and tricks on this way of making money.

As the popularity of online shopping increases, the number of returns skyrockets too. Last year, an average of 16,6% of all retail purchases at physical and online stores were returned on average, according to a report from the National Retail Federation.

Some of these returns go to liquidation warehouses, mostly when retailers don't have room for inventory. This can also happen when retailers want to save money: hiring people to check returns and the cost of repackaging items can make it expensive to process returns.

The results

Jamie and Sarah say there's another reason why resale returns are particularly lucrative: With a potential recession approaching, people are more willing to buy used items at a discount.

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“When a recession hits, people don’t want to pay full price for things,” Sara said. “Resellers thrive during a recession because people are trying to save money in every possible way.”

The couple's videos of buying returns are popular on their YouTube channel, which also includes material on reselling furniture, renovating a home, and investing in real estate. The McCauleys have earned over $102 from YouTube this year, boosting their bottom line significantly.

The videos have a dual purpose: according to Jamie and Sarah, they want to show viewers that anyone can make money reselling, especially in a volatile economy.

“This is a great way to make extra money if you have bills, or just can't pay rent, or want to take a break with your family,” Sarah summed up. “Everyone can do it.”

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