The post-holiday period is witnessing a significant surge in product returns, a trend that Adobe Analytics data suggests could be particularly pronounced this year. As consumers process their holiday purchases, a substantial volume of unwanted items is making its way back to retailers. This annual phenomenon, often dubbed “return season,” presents both logistical challenges and considerable financial implications for the retail sector.

Retailers anticipate a substantial portion of their sales will be returned, with companies projecting an average of 16% of their 2025 sales to be affected, according to a joint report by the National Retail Federation (NRF) and Happy Returns, a UPS company. While this figure shows a slight decrease from the previous year, it represents a doubling of the 8% return rate observed in 2019, highlighting a dramatic shift in consumer purchasing habits over the past five years.

The rise in return volumes stems from several interconnected factors. The expansion of e-commerce, which accelerated significantly during the COVID-19 pandemic, coupled with the widespread adoption of flexible and generous return policies, has profoundly reshaped consumer expectations. Shoppers have grown accustomed to hassle-free processes, often perceiving returns as a standard and expected part of the purchasing journey.

The financial burden on retailers extends far beyond the mere loss of a sale. Simone Peinkofer, an assistant professor of supply chain management at Michigan State University, estimates that returns can amount to approximately 60% of an item’s original cost. This substantial expense covers various operational aspects, including staffing for inspection and restocking, as well as potential losses from offloading items to liquidators or off-price retailers at reduced prices.

Beyond the economic strain, the sheer volume of returned goods carries a significant environmental cost. The process often results in billions of pounds of waste, with many returned items and their packaging ultimately ending up in landfills. This contributes to a growing sustainability concern within the retail industry, prompting calls for more efficient and eco-friendly return logistics and disposal methods.

In response to these escalating costs and complexities, a growing number of retailers are implementing measures to mitigate the impact of returns, primarily through the introduction of various fees. These charges aim to offset operational expenses and discourage practices that inflate return rates. This strategic shift marks a departure from the previously ubiquitous free return models that dominated the market.

Major retailers have begun charging for certain types of returns. Kohl’s, for example, applies a 15% restocking fee on specific large items, while companies such as Macy’s and Urban Outfitters now impose shipping or other fees for items returned via mail, as outlined on their official websites. These policies reflect a concerted effort to recoup some of the considerable costs associated with managing the return logistics infrastructure.

These fees also serve as a deterrent against fraudulent returns, which the NRF estimates account for approximately 9% of all returns. By introducing a cost element, retailers hope to reduce instances of abuse and ensure that genuine returns are processed efficiently. More than 70% of retailers now levy a charge for at least one type of return, an increase from 66% in 2024, according to NRF data.

Predictably, these return fees have met with considerable unpopularity among consumers. While some retailers report benefits such as reduced return volumes or increased exchanges, many also acknowledge a rise in customer complaints, indicating dissatisfaction with the overall return experience. Despite the rise of e-commerce, many Americans still prefer bringing unwanted items back to a physical store, often to avoid perceived hassles associated with mailing items.

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Keywords: retail returns, post-holiday returns, e-commerce returns, return policies, retailer costs, supply chain management, return fees, consumer return habits