January arrives, and so do the returns
The first week of January is a reality check for retailers: returns are no longer a forecast, they’re arriving in real time, at volumes that test warehouse capacity, carrier networks, and customer service teams. In fact, industry data shows that 15.8% of all merchandise sold in 2025 will be returned — roughly one in every six purchases — underscoring that returns are a structural part of retail, not just a seasonal blip.
Why the January returns wave peaks when it does
The surge isn’t a surprise, it’s the predictable result of holiday shopping habits, gift exchanges, and extended return policies. What’s new this year is the scale: early data from Retail Gazette shows retailers are handling £1.51bn in returns, with volumes hitting up 45% above normal in the first working days of January across the Nordics, UK and Western Europe.
Key drivers include:
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Bracketing: Customers order multiple sizes or variants and return what doesn’t fit. Nearly half of UK fashion shoppers follow this approach.
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Gift returns: Exchanges cluster once stores and warehouses reopen.
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Extended windows: Holiday policies push a portion of returns into mid-January, slowing restocking and reducing resale value.
The result is clear: January is no longer a quiet post-peak period. It’s a structural operational challenge and a test of how well your systems, carriers, and teams handle reverse logistics at scale.
Operational and financial impact
Returns affect multiple areas simultaneously:
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Cash flow: Refunds are issued before items are restocked, tying up capital.
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Inventory: Items sit idle, delaying resale and markdown management.
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High-impact customers: In our experience with EU and UK retailers, around 20–25% of shoppers are responsible for almost half of return volumes, highlighting the outsized impact of serial returners.
Regulatory and sustainability pressures amplify the stakes. Across the EU, new ecodesign and waste rules require returned textiles and footwear to have a clear second life, whether resale, refurbishment, or redeployment. Fast, traceable processes are now both a compliance and operational necessity.
And finally, there’s the customer experience. Returns are a critical touchpoint for trust: Clear portals, rapid first scans, and predictable refunds encourage repeat business. Poorly managed returns, on the other hand, risk churn right as shoppers plan their next purchase.
A practical playbook for January returns
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Treat January as a season
Plan capacity, shifts, and carrier agreements ahead of the first working week. Track inbound volume, scan speed, refund times, and restocking daily. -
Use scalable return routes
Lockers and PUDO networks reduce failed pickups and support consolidation. Early induction scans start refunds sooner and reduce customer service pressure. -
Focus policies where they matter most
Promote exchanges, size swaps, and store credit. Encourage fast returns for items that decay in value. Friction should target high-volume returners, not the majority of customers. -
Speed up returns without adding risk
Respect statutory rights while using clear guidance, rewards, and incentives to encourage faster returns and quicker cash flow. -
Decide the item’s next step early
Each returned item should have a pre-defined route: Restock, refurbish, outlet, or resale partner. Fast triage protects margin, improves sustainability, and ensures compliance with EU regulations.
Metrics to focus on in January
Retailers that perform well track a few key indicators:
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First scan within 48 hours
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Refunds within three business days
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A growing share of returns routed via lockers or PUDO
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Returns converted into exchanges or store credit
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Rapid restocking or resale (within 72 hours)
Focusing on these metrics turns January from a reactive scramble into a controlled, strategic period.
January, by design
Returns aren’t a surprise, they’re predictable and measurable. Retailers who plan, automate, and provide clear rules win the post-peak period. Faster scans, refunds, and resale aren’t just operational wins: they protect margin, strengthen customer loyalty, and set a positive tone for Q1.
Next January will arrive on schedule. The only question is whether your operation is prepared to manage the flow, or simply react to it.
Author
Thomas Bailey
Product Innovation Lead
