New year returns race is on as £1.55 billion worth of unwanted gifts head back

With Christmas cheer replaced with the January blues, an estimated £1.55 billion worth of unwanted items are winging their way back to retailers as the ‘Great Return’ gets into full swing.

Many people used their first day back at work, Friday 2 January 2026, to return their unwanted gifts and the trend is set to continue today, according to home delivery expert Parcelhero.

Head of Consumer Research at Parcelhero, David Jinks, said: “Compared to 2025, there was a slightly smaller spike in parcel volumes on 2 January this year but we’re expecting a big increase in shipments in the first full working week of 2026 as everyone gets back to their normal routines.

“Last year, we estimated around £1.51 billion of clothing, electrical goods and toys were sent back to retailers during the peak returns period. With sales values up by around 3% this season, it’s likely that around £1.55 billion of items bought during November and December are now heading back to sellers.”

Time is also ticking for many, as some online shoppers only have 14 days from receiving their order to tell the seller they intend to return an item to get a full refund on “no fault returns”. They then usually will have a further 14 days to actually return the item.

Jinks commented: “Fortunately, many retailers take a far less rigid approach to Christmas returns. For example, Amazon, Argos, M&S and John Lewis are among the many stores with very generous returns policies for items bought in November and December.

“However, we might want to spare a thought for Britain’s specialist and small local SME sellers. The financial burden of that £1.55 billion worth of returns will fall disproportionately on many of our favourite small traders.

“Niche online companies such as specialist electronic sellers, craft shops and vintage clothing stores, thinking they were riding high on a healthy looking profit from Black Friday and Christmas sales, suddenly find that, as the returns roll back, they are facing plunging margins and shelves bulging with now unsaleable stock.

“Compared to the ‘Big Boys’, smaller companies lose a significant and disproportionate amount of a product's profit when a return occurs. The total cost for a return for the average marketplace trader can reach up to 66% of the item's original price.”

Of course, the loss is not just the refund itself, as it also includes the costs of processing, labour, inspection and shipping.

“These costs can add up quickly, particularly for small businesses that don’t have plenty of staff to process returns,” added Jinks.

“Additionally, of course, products such as seasonal fashion items can lose value if they are not resold promptly.”