As Funko destroys $36M in toys, here’s why these 5 companies trash merch

Excess inventory can be a real problem for large companies as they attempt to make room for new items in overflowing warehouses. Sometimes corporations conclude the best business solution (but questionable environmental decision) isn’t simply marking down prices. Here are five companies that sent their own merchandise to the dump to help the bottom line in this week’s Five For Friday.

#5: Funko

Funko, the brand behind those lovable pop figures, plans to send between $30 and $36 million worth of product to the landfill this year. Following a pandemic-induced collectables boom, Funko raked in more than $1 billion in revenue in 2021. But by the end of 2022, it had $246.4 million worth of inventory on hand. Funko had to rent extra warehouse space to handle the overflow and now plans to free up that space. The company has huge licensing deals producing tons of products featuring characters from Star Wars to Harry Potter. In the future, it may want to stick with those items and stay away from making figures featuring the bass player from U2.

#4: Abbott

During surges in COVID-19 cases, it could be pretty difficult to find a test. In 2021, The New York Times reported Abbott Laboratories, the maker of BinaxNow at-home test kits, had its employees throw away testing kits when cases slowed down. This happened shortly before mass layoffs. Abbott responded to the Times piece directly, saying it only destroyed testing cards which had exceeded the 7-month shelf life. The company said it was able to save other components of the test kits, which could be used when it ramped up production after the delta variant surged later that year. Unfortunately, again, it became hard to find a test.

#3: Amazon

Amazon has fulfillment centers across the globe packed with products to be shipped to waiting customers. A 2021 investigation by Britain’s ITV News found the e-commerce giant was marking loads of items for destruction at a Scottish facility. The network followed trucks that carried new and recently-returned jewelry and electronics to recycling centers and landfills. The report found Amazon tagged more than 100,000 items for destruction in a single week. Less than 30,000 items were set aside for donation. The situation isn’t isolated to that specific fulfillment center either, it reportedly happened in France and Germany too.

#2: Richemont

Cartier and Montblanc owner Richemont destroyed more than $500 million worth of unsold watches over two years starting in 2016. Sales had dwindled in Asian markets and the company claimed selling unsold watches at a discount and on the “gray market” would diminish the value of the brand. Luxury brands are some of the biggest offenders of destroying perfectly sellable goods. Coach previously admitted to destroying items that were returned in-store which the brand deemed damaged or “unsalable.” Coach later said it was committed to sustainability and stopped the practice.

#1: Atari

Atari’s game based on the Steven Spielberg classic E.T. The Extra Terrestrial is the stuff of legends but for all the wrong reasons. In the early 1980s Atari was on top of the video game industry, putting out classics like Pac-Man and Space Invaders. But in 1982 it rushed the release for E.T in order to maximize sales during the holiday season and make up its $20 million investment to secure the rights.

The game was panned as the worst in history, and legend has it, millions of copies were dumped at a landfill in New Mexico. Three decades later, a documentary crew excavated the site. They dug up copies of E.T. and a number of successful titles. In the end, it wasn’t E.T. that took down Atari, but a $500 million loss that caused the company to sell. In the documentary, a former manager said New Mexico was a warehouse dump and most of the E.T. cartridges were in a landfill near the California headquarters.