Home › Industry News › Why Amazon went into refurbished
Amazon does not obviously need a refurbished business. It has the widest new-goods catalogue in retail and every incentive to sell you something factory-fresh. So the interesting question is not whether Renewed is any good — it is why the company built it at all. The answer has very little to do with sustainability marketing and a great deal to do with what happens to a product after somebody sends it back.
Physical shops get somewhere between 5% and 9% of their goods back. Online, the figure is roughly 19% to 20% across all categories — about 11% for electronics, and as high as 25% for apparel. That gap is structural. People cannot hold the thing before they buy it, so more of what ships comes back.
The cost of that is not the shipping label. Processing a single return runs to around $20–$30 an item, and closer to $40 once you count the markdown on something you can no longer sell as new. Reverse logistics eats 20–25% of the product's value; on some estimates handling a return costs about 30% of what the item is worth. Across US online retail, return-related losses are projected to pass $247 billion in 2026, up from $220 billion in 2024.
A $500 phone that comes back is not a $500 asset. Strip out reverse logistics and the markdown and you may be holding $300 of value, tied up in a box, in a warehouse, depreciating at roughly 1% a week. Every day it sits undecided, it is worth less. That pressure — not idealism — is what makes a company build a refurbishment pipeline.
If reselling costs more than the item recovers, the rational move is disposal. That is what a lot of retail quietly did, and in June 2021 ITV News put numbers on Amazon's version of it. Reporting from the company's Dunfermline warehouse in Scotland, it found roughly 124,000 items marked “destroy” in a single week in April. About half were customer returns. The other half had never been opened.
The reputational damage was immediate, and the response was unusually structural for a PR problem. Within weeks Amazon announced FBA Grade and Resell: rather than returning or destroying a seller's returned stock, Amazon staff would inspect it, assign one of four used conditions — Like New, Very Good, Good, Acceptable — and put it back on sale. It launched in the UK first and reached the US the same year.
Read that programme carefully and it is not a recycling initiative. It is a grading standard, an inspection workflow and a resale channel. That is the machinery of a refurbished business.
What turned a reputational fix into a permanent strategy was regulation.
France's anti-waste and circular economy law (AGEC) banned the destruction of unsold non-food goods from 1 January 2022 — a world first. The categories it covers include electrical and electronic equipment. The same law forces manufacturers to print a repairability index, scored out of ten, on smartphones and laptops.
From July 2026, the EU's Ecodesign for Sustainable Products Regulation extends a destruction ban on unsold consumer goods across the bloc for large enterprises.
Regulation explains why Amazon could not keep destroying stock. It does not explain why the company built a consumer-facing brand around refurbished goods rather than quietly liquidating them to wholesalers. Back Market explains that.
The French marketplace was valued at €5.1 billion as of September 2025, forecast more than €3 billion in gross merchandise value for the year at over 30% annual growth, and serves around 17 million customers across 18 markets through roughly 2,700 vetted refurbishers. The US is now its second-largest market, and it expected to reach profitability in 2026.
That is the proof point. Buyers were not treating refurbished as damaged goods at a discount. They were treating it as a category — one with its own grading vocabulary, its own warranty expectations and, crucially, its own margin. A returns pile that can only be liquidated is a cost centre. A returns pile that can be graded and sold into a category with brand loyalty is inventory.
This is where the strategy becomes visible, and it is something we can show from our own scoring rather than infer. We rate Amazon's refurbished operations as two separate entities, because they are two separate things.
| Operation | What it actually is | Our US TrustScore |
|---|---|---|
| Amazon Warehouse | Amazon's own returned, open-box and warehouse-damaged stock, graded in-house and resold | 75 |
| Amazon Renewed | A qualified-supplier programme with published battery, warranty and pricing standards | 82 |
Warehouse is the returns-recovery engine — the direct descendant of the destruction problem. Renewed is the category play: a set of standards that lets Amazon compete with Back Market without having to run refurbishment workshops itself. One solves a logistics liability. The other builds a market position. Most retailers attempting recommerce have only built the first.
The pricing rule gives the game away too. Renewed listings must sit at least 5% below the equivalent new product. That is not how you price salvage. It is how you set a floor under a category you intend to keep selling into, while protecting the new-goods business sitting next to it.
Understanding the motive is genuinely useful at the checkout, because it tells you what each programme is optimised for.
Amazon entering refurbished is not really a story about Amazon. It is the clearest available signal that refurbished stopped being a discount bin and became a distribution channel that the largest retailer on earth cannot afford to sit out.
Returns made the supply. Regulation removed the escape hatch. Back Market proved the demand. What was once the awkward end of the retail process — the bit nobody wanted to talk about — is now a category with grading standards, warranty norms, price floors and competing brands. That is what a market looks like when it grows up.
Because returns made it unavoidable. Around a fifth of online purchases come back, and processing a return can cost close to a third of the item's value. Destruction was the cheap alternative until a 2021 ITV News investigation made it a public scandal and France banned the practice from January 2022, with an EU-wide restriction following in July 2026. Refurbishment recovers value from stock that can no longer be destroyed or sold as new.
Amazon Warehouse sells Amazon's own returned and open-box stock, graded in-house. Amazon Renewed is a programme that qualified third-party refurbishers sell under, with published standards for battery health, warranty and pricing. Warehouse is a returns-recovery channel; Renewed is a category strategy.
It is growing. Back Market alone was valued at about €5.1 billion in September 2025 and forecast more than €3 billion in gross merchandise value for the year at over 30% annual growth, serving roughly 17 million customers across 18 markets. Amazon building competing infrastructure is a second data point in the same direction.
It forces them not to destroy, which amounts to much the same thing. France's AGEC law has banned the destruction of unsold non-food goods, including electronics, since January 2022. From July 2026 the EU's Ecodesign for Sustainable Products Regulation extends a destruction ban to large enterprises across the bloc. Once disposal is closed off, resale and refurbishment are what remain.
No. Amazon's own programme terms require Renewed listings to be priced at least 5% below the equivalent new product — a floor, not a promise of the best price. Specialist refurbishers frequently undercut it, which is why comparing across sellers is still worth doing.
Market figures are third-party estimates and vary by source and methodology; they are used here to show scale and direction, not precision.