For retailers, the real stress test of the holiday season doesn’t arrive with Black Friday or Christmas Eve. It arrives after the gifts are opened.
New data from Adobe Analytics indicates that retail returns are set to climb sharply in early January, with volumes expected to rise 8% to 15% in the first two weeks of the month compared to earlier in the holiday period. That uptick follows an even steeper surge immediately after Christmas, when returns between Dec. 26 and Dec. 31 are projected to jump 25% to 35%.
The takeaway is clear: returns may have eased during peak shopping weeks, but the annual post-holiday reckoning is very much intact.
What the Data Shows: Fewer Returns First, Then a Sharp Reversal
During the heart of the holiday shopping window, returns were actually lower than usual. From Nov. 1 to Dec. 12, return volumes declined 2.5% year over year, according to Adobe. Even in the seven days following Cyber Week, returns slipped slightly, down 0.1%.
That trend, however, reflects timing rather than structural improvement. Once gift-giving concludes, delayed returns surface all at once—driven by unwanted gifts, sizing issues, and post-holiday budget recalibration.
In other words, December suppresses returns temporarily; January releases the backlog.
A Subtle but Important Shift: How Consumers Return Items
Beyond volume, the data highlights a behavioral split that retailers can’t ignore.
While mobile devices accounted for more than half of total online spending between Nov. 1 and Dec. 12, only 39% of returns during that period were completed on mobile. The majority of returns were initiated on desktop devices.
This suggests that returning items is still perceived as a more deliberate, friction-heavy task—one consumers prefer to handle on larger screens, even if the original purchase was made on a phone. For retailers investing heavily in mobile commerce, this gap underscores a weak point in the post-purchase experience.
Holiday Demand Was Strong — Especially at Home
The returns spike follows a solid holiday shopping season. Adobe reports that consumers spent $187.3 billion online between Nov. 1 and Dec. 12, up 6.1% year over year.
Home-related categories led growth by a wide margin:
Refrigerators and freezers: +400%
Home security products: +380%
Washers and dryers: +380%
Holiday décor: +350%
These big-ticket, delivery-heavy items also tend to generate complex return scenarios—logistics-intensive, costly, and difficult to resell.
Why Returns Are No Longer Just an Operations Problem
Return policies increasingly shape how and where consumers shop. A 2024 report from the International Council of Shopping Centers (ICSC) found that most shoppers factor return terms directly into purchase decisions. If required to pay for online returns, many consumers say they would instead return items in-store—shifting costs and labor back to physical locations.
This makes returns not just a logistics issue, but a channel strategy lever that affects traffic, staffing, and customer loyalty.
The Bigger Picture: Returns as a Structural Retail Cost
Despite incremental improvements in fraud detection, fit technology, and reverse logistics, returns remain one of retail’s largest hidden costs.
According to the National Retail Federation, shoppers returned an estimated $890 billion in merchandise in 2024, representing nearly 17% of total retail sales. That scale dwarfs most efficiency gains retailers can achieve elsewhere.
Convenience keeps consumers loyal—but it also locks retailers into a high-cost equilibrium that few have successfully escaped.
Outlook: January Is the Reminder Retailers Can’t Ignore
The expected January surge reinforces a familiar reality: returns are no longer seasonal anomalies. They are a permanent feature of modern retail economics.
Retailers that treat returns purely as a post-holiday clean-up task will continue to absorb rising costs. Those that redesign return flows—across digital interfaces, store operations, and supplier agreements—stand a better chance of turning an unavoidable burden into a competitive differentiator.
January doesn’t just mark a new year. For retail operations, it marks a reckoning.
Source: Based on reporting from Retail Dive