Businesses are bracing for a record £1 billion worth of Christmas gifts to be returned to shops by ungrateful recipients this year – with others choosing to sell them online still wrapped.
An estimated 52 million presents – with an average price of £57 each – are expected to be sent back in exchange for refunds, exchanges or store credits during the post-Christmas period.
It leaves retailers whose sales skyrocketed in December in a challenging position to meet targets.
Those who returned to work on January 2 and 3 dashed to the shops in their lunchbreak or after their shifts to return gifts they were unimpressed by.
Topping the list of the most unwanted gift category in delivery expert Parcelhero’s study for a second year in a row is clothing, with 39 per cent returning them to shops.
Following closely behind is footwear, which is returned by 37 per cent of giftees – jumping up from 21 per cent in 2024.
Jewellery or watches (12 per cent) and cosmetics (12 per cent) also feature prominently in unwanted gift returns.
Parcelhero’s Head of Consumer Research, David Jinks M.I.L.T., said: ‘Last year, we estimated around £1.51bn of clothing, electrical goods and toys were sent back to retailers during the peak returns period.
‘With sales values up by around 3 per cent this season, it’s likely that around £1.55bn of items bought during November and December are now heading back to sellers.’
On eBay there are plenty of sellers listing ‘job lots’ – or bundles – of Christmas presents still wrapped in festive paper
An estimated 52 million presents – with an average price of £57 each – are expected to be sent back in exchange for refunds, exchanges or store credits during the post-Christmas period (stock image)
Depop is filled with listings under ‘unwanted gift’ with people selling Ugg boots, trainers, perfume and jewellery
Older generations who grew up with less and made do with what they had are, unsurprisingly, the least likely to return a present they don’t like or want.
Almost 9 in 10 (87 per cent) of those 65 and over claimed not to have returned any gifts last Christmas.
In contrast, Gen Zers, who grew up in a world of over-consumption and now champion anti-consumerism and minimalist movements, are most likely to return presents.
Over half (53 per cent) of 18 to 24-year-olds admitted to returning at least one last Christmas.
Other tech savvy young Brits have taken to flogging them on selling sites, including eBay, Facebook Marketplace and apps popular with Gen Z like Vinted and Depop.
Searches for ‘unwanted gift’ on these sites bring up streams of brand new items, such as toiletry sets, Ugg boots, trainers and coffee machines.
On eBay there are plenty of sellers listing ‘job lots’ – or bundles – of Christmas presents still wrapped in festive paper.
However, just four days after Christmas HM Revenue & Customs warned people who were thinking about selling their unwanted gifts to double check the laws around tax.
In a post on X, it provided a link to a government information webpage and said: ‘Unwanted #Christmas gifts?
‘If you plan to sell your own personal items, such as used clothes or an old TV, you don’t need to pay income tax on this.
‘More info on additional income and the tax rules below.’
On Vinted people are selling unwanted toiletry sets and perfumes gifted to them for Christmas
A search for ‘unwanted gift’ on Facebook Marketplace brings up more giftsets and even coffee machines
Information on the website states that selling unwanted gifts falls under the remit of selling personal items which you do not need to tell them about and will not be taxed for.
But in the unlikely event you make more than £6000 from selling unwanted gifts, then you would have notify them as it would be taxable.
In fact, selling on presents you don’t want could help out small businesses, who suffer more from Christmas returns than large companies.
If someone gifts you something from a smaller, independent business, flogging it online would allow them to keep their December profits.
Mr Jinks said ‘We might want to spare a thought for Britain’s specialist and small local SME sellers. The financial burden of that £1.55bn-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 per cent of the item’s original price.
‘The loss is not just the refund but 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.
‘Additionally, of course, products such as seasonal fashion items can lose value if they are not resold promptly.’
A few years ago, Parcelhero spoke in detail to a number of specialist sellers about the returns issue and found the final nail in the coffin for small online retailers may be that 8 per cent of shoppers admit to returning items several times a month, irrespective of whether that’s to large businesses such as ASOS or niche craft stores.
The study revealed a large chunk of these returns happen in the post-Christmas period.
Around 47 per cent of all Parcelhero shipments were marked as ‘returns’ in the first week of last year.
Mr Jinks said: ‘Last January, some traders told us that they were coping with return rates as high as 60 per cent following Black Friday and the pre-Christmas peak.
‘Many small sellers feel that they have to accept such returns unconditionally in order to maintain their all-important five-star ratings.
‘Small online marketplace traders told us returns cost them at least 13 per cent more than High Street-only stores because of the 14-day “cooling off” period for products bought online under 2014’s Consumer Contracts Regulations.’
