August 31 -- Retailers are reporting brisk sales of portable generators as millions of Americans remain without electricity after Hurricane Irene, but the stores are likely to face a rush of returns once the lights come back on.
Generators powered by gasoline, propane or natural gas have become a niche industry in recent years as more U.S. homeowners seek to ensure they can keep lights, refrigerators and air-conditioning systems running during extended blackouts.
That is proving to be the case this month as consumers flocked to chain stores such as Wal-Mart Stores Inc., Home Depot Inc. and Lowe's Cos. to buy generating units costing hundreds, or in some cases, thousands, of dollars, before and after Irene struck the eastern seaboard.
"Demand has been extremely heavy," said Todd J. Teske, chief executive of Briggs and Stratton Corp., one of the top portable-generator manufacturers. "It's not unusual to see 100,000 generators go out—we saw that certainly during Katrina—and I fully expect this storm to be similar."
But consumers who come to regret the pricey purchases often try to return portable generators after their personal emergency passes, a phenomenon one manufacturer executive sardonically called a "weekend rental."
Retailers typically say they allow returns of generators if they haven't been used, while some take back used items—for a fee. Home Depot accepts returns of gasoline-powered items like generators within 30 days of purchase, but it reserves the right to charge a maintenance fee if a used item has to be cleaned or restored to resell.
Either way, the stores usually bear the financial brunt of returns, especially in areas such as the Northeast, where residents are less likely to need them again soon than in more hurricane-prone areas.
A spokeswoman for Lowe's said Tuesday that the retailer had yet to see an unusually high rate of returns.
Nick Mohabir, 38 years old, a supervisor at Bruno's Home Center in Brooklyn, N.Y., said his store sold out of generators before the storm. One man from Long Island indicated he wanted to return his, Mr. Mohabir said.
"I said, 'Are you for real, buddy?' " Mr. Mohabir said. "I said, 'Listen, it ain't going to happen. If you use it, you can't bring it back.' "
Retailers all refuse to disclose exact sales, but they say generators are among the emergency items most in demand at stores in heavily affected states such as North Carolina and Virginia.
"It's definitely one of the key items people want," said Dianna Gee, a Wal-Mart spokeswoman.
Managers at a Lowe's store in eastern North Carolina and a Home Depot near the southern New Jersey coast reported that generators were among the items selling almost immediately upon arrival.
"We've seen a fivefold increase in orders this month," said Duane Nelson, vice president of marketing for Generac Holdings Inc., a leading generator maker whose units are sold at Home Depot and Lowe's. "The problem most people in the country are unaware of is that when you have an event of this magnitude, there are just not enough generators in the marketplace to meet the demand."
A rush to buy generators has become such a predictable rite during hurricane season that retailers and manufacturers stockpile units heading into the summer months. Many residents in the Southern U.S. avoid the rush by spending thousands of dollars to have standby generators installed in their homes beforehand. In Florida, Generac says about 2% of single family homes now have backup systems, one of the highest rates in the U.S.
Mr. Teske of Briggs and Stratton said storm events typically lead mentally scarred consumers to purchase generators for months after the fact.
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