Circular Economy

Unwrapping the Holiday Returns Crisis:
The Hidden Costs of Convenience

Product returns should no longer be viewed as an inevitable cost of doing business but as an opportunity to innovate. It’s time to broaden consumer awareness of the fate of most returned goods and change that story by closing the loop.

Brand Provided | By Emily Hosie | Published 1 week ago | About a 5 minute read

Image: Kindel Media

Each year, as we approach the holidays, retailers eagerly anticipate the annual increase in consumer spending. Yet, hidden behind the glittering storefronts and enticing e-commerce deals lies a costly, hidden crisis: the growing mountain of returns. Every year, billions of dollars’ worth of products purchased during the holiday season are returned. Many of these products — the majority of which are never used — end up in landfills. This crisis calls for innovative solutions to transform how both retailers and consumers perceive and handle returns.

The convenience of online shopping and customer-centric return policies have fueled a culture of casual consumption. Consumers shop with abandon — knowing they can easily return what doesn’t fit, doesn’t work or they change their mind about. Post-holiday returns have become a predictable byproduct of this behavior, with spikes in returned items occurring just after Cyber Week and again immediately after Christmas. The scale is staggering: Last year, returns contributed to $743 billion in lost revenue; this year, that number is expected to climb even higher. The monetary cost is just one part of the problem.

What we don’t see, and is even more alarming, is the environmental impact that this crisis causes. Many people believe that when you return an item it will eventually make its way into the home of another customer — but that is rarely true. When products are returned, they hardly ever make it back to a store shelf or even a warehouse. For the majority of retailers, the logistical and monetary challenges of inspecting, repackaging, and reselling returned goods make it more cost-effective to dispose of them altogether. This is especially true for hard goods including baby gear and home goods, where bulky and high-value items require additional inspection to ensure quality standards are met. As a result, 9.5 billion pounds of returned goods — equivalent to 10,500 fully loaded Boeing 747s — of waste are dumped in landfills annually.

The rise of e-commerce has only escalated the returns crisis. Online shopping leads to almost 3 times as many returns as store purchases. Consumers are restricted in their ability to touch and try a product before purchasing — often leading them to err on the side of caution and purchase multiple sizes, colors or variations of a product; then, keep just one and return the rest. Online retailers also compete to offer the most flexible return policies to drive customer loyalty, further normalizing these unintentionally wasteful shopping behaviors.

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What’s missing from the conversation is the consumer’s understanding of the environmental costs behind returns. As a society, we have strong education around the practice of recycling, but most consumers are in the dark as far as the impact of their consumption habits on the environment. While there is a growing consumer preference for sustainability practices, with 74 percent of shoppers saying it’s a priority, many remain unaware that their return-heavy shopping habits contribute to a wasteful cycle.

Why is there such a disconnect between consumer values and shopping habits? The retail marketing machine plays a big role, promoting convenience without transparency — free returns are often framed as a win-win for customers, with little insight into what happens to returned items once they’re shipped back. An aware consumer would mean that brands must completely reassess their reverse logistics chain. While some retailers have started to resell or donate returned items, a significant portion still ends up in landfills — since the cost of redistributing them is seen as outweighing their resale value.

Solving the returns crisis may feel daunting, but there are many solutions within reach. Retailers must start reimagining not only their return policies, but the entire lifecycle of their products. Advances in technology and partnerships with circular solution providers are beginning to make the impossible possible. An example of this is my company, Rebelstork: We are the largest returns recommerce platform in North America for open-box and overstock baby and home products. Our entire business strategy is based around circularity — particularly, the core belief that we can revolutionize the returns industry with technology and a new way of thinking. Rebelstork partners with over 2,500 brands to be their returns solution; by doing so, we have kept over 12 million pounds of products out of landfills each year.

There are many other proactive steps retailers can take to reduce returns and their associated waste:

First, they can implement tools to help consumers make more informed purchasing decisions, such as virtual try-ons or detailed size guides. These measures can reduce the need for returns by helping shoppers choose the right product the first time they buy.
Second, investing in reverse logistics systems or returns partners can make processing and reselling items easier.
Lastly, they should take the appropriate steps to educate their customers on the importance of more mindful shopping. Simple, transparent messaging can encourage shoppers to think twice before overbuying or making impulsive purchases.

Ultimately, tackling the returns crisis will require a shift in perspective. Returns should no longer be viewed as an inevitable cost of doing business but as an opportunity to innovate. Retailers that take bold steps to address this issue will not only improve their sustainability practices but also strengthen their reputation in a society that increasingly values purpose-driven brands.

As we head into another holiday season, I am reminded of why I started Rebelstork and what drives my passion for solving the returns crisis. It’s time to broaden consumer awareness of the fate of most returned goods and change that story by closing the loop.

Let's turn one of retail’s biggest challenges into a catalyst for change. After all, the costs of this crisis go way beyond those seen on a company’s balance sheet.