What’s driving the returns boom?

As the festive season ends, businesses face a new challenge: returns. While Christmas is a peak sales period for many, it also signals the start of a critical returns period. Whether your busy season is December or mid-year, returns can significantly impact profitability, customer satisfaction, and operations.

But what trends are driving the surge in returns? What challenges do they create for businesses? And how are retailers adapting their processes to stay ahead? Let’s dive in.

The growing challenge of returns

Returns have been rising steadily in the UK, particularly in online retail. Recent studies found that 69% of Gen Z shoppers engage in “bracketing,” ordering multiple sizes or colours with the intention of returning items. This behaviour contrasts sharply with just 16% of baby boomers who do the same (Vogue Business). The post-Christmas period is especially problematic, as gift returns and exchanges peak.

Discover more facts and figures on returns in 2025 here.

What's driving returns?

The surge in returns is no accident—it’s a product of evolving consumer behaviour and modern shopping trends.

1. Online shopping habits
The convenience of online shopping has given rise to “haul culture,” where shoppers—especially younger generations—order in bulk, intending to keep only what they like. This behaviour fuels return rates and creates significant operational challenges.

2. Gift returns
Post-Christmas, gift returns spike as recipients exchange items for better sizes, alternatives, or to avoid duplicates. For retailers, this adds to the already high return volumes during the festive period.

3. Customer expectations
Today’s consumers expect returns to be simple and seamless. Any delays or inconvenience can lead to frustration and lost loyalty, putting even more pressure on businesses to get it right.

Environmental and financial impacts

The environmental and financial costs of returns are staggering, with the UK fashion industry alone seeing returns valued at over £7 billion in 2022, generating around 750,000 tonnes of CO₂ emissions. A significant portion of this comes from transportation during reverse logistics (Vogue Business). Items often end up in landfills because processing costs, such as inspection, repackaging, and restocking, can outweigh the resale value. Additionally, products returned in poor condition or deemed unsellable are frequently discarded, while fast fashion dynamics render some returned items obsolete by the time they are processed.

Financially, returns erode profit margins. In 2024, online non-food returns in the UK are projected to reach £27.3 billion, with serial returners—11% of online shoppers—accounting for £6.6 billion of this total (Retail Economics).

The rise in returns has prompted some retailers to implement return fees, but this strategy risks alienating customers, with a recent survey confirming that six in ten British shoppers would stop purchasing from retailers that charge for returns (The Times).

How retailers are adapting

Retailers are stepping up to confront the growing returns challenge with smarter, more strategic approaches. From enhancing product descriptions and adopting virtual fitting tools to leveraging predictive analytics for better stock management, businesses are finding ways to reduce returns before they happen. Many are also prioritising sustainability, introducing recycling and donation programmes to keep returned goods out of landfills.

Want to see how an ERP system like Orderwise can transform how you manage evolving customer behaviours? Hear from one our our experts in the video below.

Turning returns into opportunities

Returns are a reality of modern retail, especially in the post-Christmas rush—but they don’t have to be just a headache. For businesses ready to adapt, this period is an opportunity to innovate, build loyalty, and gain a competitive edge. By understanding what’s driving returns and implementing smart, efficient solutions, retailers can turn a seasonal challenge into a long-term advantage.

Want to know how to manage your returns more effectively? Discover more in our latest guide or get in touch today to discover how an Orderwise solution can support your post-Christmas operations and beyond.