Christmas Gifts Often Miss the Mark — U.S. Returns Surge Past 4.04 Trillion

(Washington, 26th) Gift exchanges are often the highlight of Christmas, but for many Americans, the holiday season ends with a trip to the returns counter. According to Axios, apparel—especially clothing, shoes, and hats—makes up the largest share of post-Christmas returns, largely because sizing, fit, and personal style are difficult to get right the first time. Overall, total returns this year are estimated to reach as high as US$1 trillion (about RM4.039 trillion).

Axios notes that Americans return tens of billions of dollars’ worth of Christmas gifts annually, turning what’s meant to be a thoughtful gesture into one of retail’s biggest recurring cost drains. The returns peak typically hits within days after the holidays. Data from Adobe Analytics shows that starting on December 26, return volumes jump about 25% to 35% compared with earlier in the month.

Apparel is the biggest “pain point”

This weeks-long wave of returns is commonly dubbed “Returnuary,” stretching well into January and putting significant pressure on return desks and logistics networks. The most frequently returned gifts are clothing and footwear.

Items like sweaters, socks, and other wearables are easy to buy—but easy to miss on size, fit, and taste. Accessories such as hats, scarves, and jewelry are also convenient gifts that can still be chosen incorrectly. For electronics and gadgets, common return drivers include duplicate purchases, defects, or products that don’t match a recipient’s lifestyle.

Seel, a returns platform, reports a sharp surge in holiday-season returns last year and projects that in 2025, around 20% to 25% of total annual sales could be returned—equating to roughly US$1 trillion in merchandise. Seel also attributes a roughly 16% jump in November–December returns to the combined effect of early shopping and last-minute buying. The average returned item typically falls in the US$100–US$200 range (about RM404–RM807).

Many returns never make it back to shelves

A significant portion of returned goods never gets resold. REBEL founder and CEO Emily Hosie told Axios that most brands lack cost-effective infrastructure to process and reintroduce returned items, meaning they often don’t go back on shelves. She added that about 8.4 billion pounds of returned goods end up in landfills each year.

Dupe.com co-founder and CEO Bobby Ghoshal said sizing remains the top reason for returns—people care deeply about fit. Meanwhile, Omnisend e-commerce expert Marty Bauer noted that return rates for classic gift categories like toys and beauty products stay relatively stable after the holidays, suggesting that many post-holiday returns are driven by rushed purchases.

Axios also points out that retailers can use AI to reduce returns, though not eliminate them entirely. A Talkdesk holiday survey found that AI tools may help shoppers make smarter choices before purchase: 73% of consumers said AI would make them less likely to return items, up from 69% last year.