Looking to save money? Try shopping at bin stores.

Ever wonder what happens when you send a coffee maker, clothing or other items you bought back to retailers like Amazon? The short answer: Big U.S. retailers resell a lot of returned merchandise to liquidators, which then sell items to "bin stores," where consumers can buy the goods at a steep discount. 

The Little Depot, which has three bin stores across the U.S., resells a fraction of it to eager consumers, some of whom will sleep in their cars just to be first in line so they can score discounts on a range of goods, including clothing, electronics and barbecue grills. 

"Say you walk in and you leave and you buy 10 items, you pay $100, it's $1,000 worth of items," Paul Barboza, the owner of The Little Depot in Pasadena, Calif., told CBS News.  

Amazon, Target, Walmart and Macy's are among the major retailers that sell returned goods to liquidators, which in turn resell electronics, home furnishings, clothing and more to independently owned bin stores like The Little Depot. 

Everything at Barboza's store costs $10, regardless of its original list price. One shopper held up a pair of Beats headphones, which can cost hundreds of dollars which she had purchased for $10. Laptops, as well as an air purifying system worth over $400, were also on offer at The Little Depot's Pasadena location. Lawnmowers, grills and power tools were up for grabs for up to 80% off. 

Roughly $743 billion worth of merchandise was returned last year, while more than 17% of online purchases are returned, according to the National Retail Federation. 

Barboza, who opened his first bin store in 2020, said he's turned a profit over his four years in the business and expects to be operating five stores by year-end. He also sees it as beneficial for the environment. 

"I see it as a positive. I feel like it would end up in landfill," he said of the returned merchandise he resells. 

Some bin store shoppers are in it for the merch, while others are in it for the savings. Elmo Ramirez told CBS News he visits the stores to buy goods that he resells at a profit, which he said is a lucrative side-hustle. For example, he picked up a Sony PlayStation 5 game console for $10. He said reselling goods like this can net him as much as $1,600 on a good day. 

"It's one way to make a lot of money. I'll make $1,600 in one day. Probably I spent $100, $150," Ramirez said. 

Megan Cerullo

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News 24/7 to discuss her reporting.