A well-known company known for its high-end fashion products such as sunglasses, watches, jewelry, and accessories is Louis Vuitton (LV). The company has become well-known around the world and has more than 460 stores spread across 50 countries.
It may come as a shock to learn that, despite the fact that LV products are well-known for their high prices, the company actually destroys all of its unsold bags at the end of each year. The reasoning behind LV’s decision to burn these items in place of altering or donating them is rather strange.
This extreme step is taken by the company to prevent the sale of its goods at a discount and maintain the exclusivity for which LV is known. This practice is also influenced by a US law called “duty drawback.” According to this law, the company is entitled to a duty refund if an imported item is destroyed with customs’ permission after duty has been paid on it.
Given that duty rates on Louis Vuitton bags are high, typically averaging between 15 and 25 percent, the business makes up some of its losses through these duty refunds.
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