What do you do with returned stock? While some open-box, returned or damaged products can be sent back to the manufacturer to be later sold as factory refurbs, that's not the case for all product categories. The following are just some of the ways retailers are re-selling returned/damaged stock:
Zappos doesn't frown upon ordering 3 sizes and 3 colors of a shoe to try on, with 365 days to return unworn merchandise. If returned items are no longer carried on Zappos.com or come back damaged, Zappos sends the soles to its (physical) outlet store. Other retailers have outlet sections on their online stores.
Tapping into high-traffic shopping sites like eBay and Amazon is a great way to sell open-box/slightly damaged merchandise.
Returned to Stock Category
AltEnergy lives its renewable energy philosophy with its Open Box/Returned to Stock category:
Down-selling on Product Pages
I've never seen a merchant "downsell" its own stock before (well, other than Amazon promoting marketplace offers), but CSN Stores shows relevant returned items on product pages for huge savings:
Giving Back to the Community
Mountain Equipment Co-Op is not necessarily doing this but it could tap into its own Gear Swap community to sell merchandise it can't advertise as in "new" condition.