Answer by Syama Meagher:
After a product has been exhausted (multiple POS’s and Markdowns), retailers will often ask brands to buy back or at least help pay for all these markdowns.
Annie is correct that many items go through the outlets and live there for many seasons/years. At Gucci we would have products 10 years old sitting in the outlets. These items eventually get sold at a friends and family sale so as to product brand integrity.
Alternatively many retailers do donate products to charities and have started to reuse materials. Sadly, there are still brands and companies who dump their products.