If the defect is recurring, or on a really expensive item - yes. It will go back to the manufacturer. But many defective items aren't indicative of a mass problem, but rather a one-off slip up.

If it costs $10 to ship a product from the customer to the wholesale, and then another $10 so ship it back to the manufacturer for a refund, it just doesn't make sense to do for inexpensive items each time a defective one is discovered.