What does Walmart, target and other retailers do with the merchandise that doesn't get sold?
It depends on what the items are. For food, they will usually clearance up to one week prior to the 'Sell by' date. After that, they must throw away the food item for health reasons.
In my work, damaged items get put into a 'flea market' for employees to buy at clearance price. If no one buys it, we donate them to hospitals that can't afford our items. (We charge more but our shipping and accuracy is what puts this company in Forbes 500 list of admired companies.
If recycle if possible, then that is another solution.
They keep lowering the prices until someone buys it.
But What if they still don't get sold?
some brand name clothes go to Ross.