British shoppers are expected to send back £1.5bn worth of Christmas gifts this year, according to new research by Manhattan Associates.
The research highlights the logistical and financial challenges facing retailers post-Christmas, as 67 million gifts are forecast to be sent back.
According to the data, almost 23% of Brits exchange unwanted gifts for an alternative item, 21% donate them to charity shops, while 19% regift to other people.
A further 17% store unwanted gifts away, and 12% return their items for a full refund.
The most commonly returned Christmas presents include clothing, with 42% of consumers having returned a garment. Another 21% return shoes, 16% return cosmetics and 15% returned jewellery or watches.
Returning items is also a source of frustration for shoppers as 39% cited long refund waits and 33% said unclear policies were main points of annoyance.
Another 40% of shoppers said they would avoid a retailer if they found their returns process “difficult”.
Last year, 65% of Gen Z shoppers returned gifts, significantly more than older generations as only 19% of the 65+ demographic returned items.
Manhattan Associates vice president of Northern Europe Craig Summers said a “seamless and customer-centric” return experience is necessary for building trust and long-term loyalty with retailers.
He added: “Efficient returns management is vital during peak holiday season as businesses balance the need for streamlined processes with maintaining customer satisfaction.
“Investing in solutions such as robust reverse logistics and AI-powered customer service, coupled with clear communication and efficient processes, is crucial for retailers navigating this challenge effectively.
“There’s more to returns than software and pound signs though. Retailers need to also consider the emotional aspect of returns. Customers often feel awkward or disappointed when returning gifts, and a smooth, empathetic process can make all the difference in maintaining loyalty and a positive brand experience.”
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