For many retailers, January is no longer a slow period following the holidays. Instead, it has become a second peak driven by the volume and cost of product returns. Merchandise sold during November and December increasingly flows back to retailers in early January, placing pressure on logistics, staffing, and margins at a time once considered relatively quiet.
U.S. retail returns are projected to reach $849.9 billion in 2026, representing about 15.8 percent of total retail sales. Returns from online purchases account for a disproportionate share, with an estimated 19.3 percent of e-commerce sales expected to be sent back. While return rates have eased slightly from last year, the total dollar impact remains significant
Holiday sales amplify the challenge. The NRF expects U.S. holiday retail sales to exceed $1 trillion for the first time, with roughly 17 percent of those purchases returned. That equates to about $170 billion in merchandise reentering supply chains shortly after peak season. Carriers report that return volumes typically crest in early January, coinciding with extended peak season shipping surcharges.
Retailers are also navigating higher processing costs, shipping fees, and broader economic uncertainty. Return fraud adds another layer of complexity, with the NRF estimating that approximately 9 percent of returns are fraudulent. Many retailers are responding by investing in technology and reevaluating return policies.
Industry practices are evolving toward lower-cost return options, such as in-store returns, consolidated drop-off locations, and incentives for exchanges or store credit. As return volumes remain elevated, January has become a recurring operational test. Retailers that plan for returns as a core part of their business strategy are better positioned to manage costs while meeting customer expectations.
