How is merchandise qualified as being factory damaged?

Merchandise is classified as factory damaged when it is returned in an unsellable condition. This typically means that the product has incurred some form of damage during the manufacturing process or during transit, making it unable to be sold to customers at full price. Such items might have scratches, dents, or missing parts that impair their functionality or appeal, rendering them unsuitable for sale as new products.

Identifying factory-damaged merchandise is crucial for inventory management as it helps stores to maintain quality standards and ensures customer satisfaction. The return of these products often requires special handling or markdowns to sell them through clearance channels instead. The other options do not pertain specifically to damage caused during manufacturing or transit, which is why they do not qualify as factory damage. Items that are out of season or too old may still be in good condition, and missing packaging does not necessarily imply that a product has been damaged in the factory sense—it might just be a result of handling.