London Daily

Focus on the big picture.
Friday, Oct 10, 2025

A 'returns tsunami' is about to deal a crippling blow to retailers

A 'returns tsunami' is about to deal a crippling blow to retailers

It's the "calm before the storm" as consumers start to ship back unwanted gifts, but it comes as retailers are still dealing with a pile of inventory.

A tidal wave of returns is about to hit retailers already dealing with excess inventory.

Inventory glut was the theme of 2022 for retailers ranging from Nike to Nordstrom to American Eagle. Quarter after quarter, retailers — particularly in the apparel space — reassured Wall Street that they were working through the mountains of extra product they'd accumulated in 2022, the result of cooling consumer demand combined with a hangover from tangled supply chains.

And while heavy holiday discounting may have helped, industry experts say retailers are months away from fully easing their inventory issues — and that it's time to brace for a record number of returns. 


A 'returns tsunami' could hit retailers in the next two weeks

The average consumer starts sending back holiday purchases in the first few weeks of January, which means retailers will start receiving them in another 10 to 14 days, according to Romaine Seguin, a former UPS executive and the CEO of Good360, a nonprofit that partners with retailers to donate returned items that can't be resold. 

"It's the calm before the storm, because right now the storm's with the UPS stores and whoever's taking all the returns," she said. 

A December report from Insider Intelligence predicted that US shoppers would send back more than $279 billion worth of merchandise by the end of 2022, equivalent to 26.5% of consumer purchasing for the year. 

For this holiday season specifically, Rob Garf, vice president and general manager of retail at Salesforce, predicted a "returns tsunami" with more than 1.4 billion, or 13%, of orders getting returned, up 57% from last year. Returns-technology platform Loops Returns found that merchants who use its platform processed 133,000 returns on December 26 and December 27 alone, 33% higher than in 2021. 

"'More returns than ever' is the headline," said David Sobie, vice president of Happy Returns, which helps process and consolidate returns for retailers. 

Why so many? Sobie chalked it up to the "one-in-a-generation shift" from shopping in person to shopping online, which has led to people "bracketing" their purchases, meaning they buy more than one color or size of an item at a time and return what they don't want. A November Happy Returns consumer survey found that a third of shoppers planned to bracket heading into the holidays.


Retailers have been dealing with high inventory since spring 2022

But even before this "tsunami" of returns hits, retailers were already dealing with too much inventory. 

Products flew off the shelves in 2021 as shoppers, flush with stimulus money and craving a return to normalcy, drove over $6.5 billion in retail sales. Consumers were buying so much stuff that retailers placed bigger-than-usual orders for the following year. Combine those goods with all the product retailers ordered in 2021 that got stuck on a boat somewhere and arrived late, and by spring 2022, retailers were overrun with inventory — just in time for inflation to slow down consumer spending. 

By September, retailers were "drowning in inventory," D.A. Davidson retail analyst Michael Baker wrote in a note at the time, with total retail inventories up 22% year-over-year.

So when the holidays rolled around, bargains abounded. Discounts on toys topped 34%, compared to 19% in 2019, while discounts on electronics reached 20% versus 8% pre-pandemic, drawing in shoppers and "helping retailers who were challenged with oversupply issues," Vivek Pandya, lead analyst at Adobe Digital Insights, said in a statement. 

But according to Baker, even with all those discounts, retailers' inventory troubles aren't over quite yet. 

"I think they've made progress, I think we're getting there," Baker told Insider. "But I think, on average, retailers won't be fully through the excess inventory at the end of the fourth quarter. My assumption is by the back half of 2023, we're not gonna be talking about inventory overhang anymore."

Comments

Oh ya 3 year ago
Just the start of the recession or depression that the world is headed into. Read banks are buying there own car lots as they are getting so many repos and are trying to recoup as much money as they can from the repos

Newsletter

Related Articles

0:00
0:00
Close
California County Reinstates Mask Mandate in Health Facilities as Respiratory Illness Risk Rises
Israel and Hamas Agree to First Phase of Trump-Brokered Gaza Truce, Hostages to Be Freed
French Political Turmoil Elevates Marine Le Pen as Rassemblement National Poised for Power
China Unveils Sweeping Rare Earth Export Controls to Shield ‘National Security’
The Davos Set in Decline: Why the World Economic Forum’s Power Must Be Challenged
France: Less Than a Month After His Appointment, the New French Prime Minister Resigns
Hungarian Prime Minister Viktor Orbán stated that Hungary will not adopt the euro because the European Union is falling apart.
Sarah Mullally Becomes First Woman Appointed Archbishop of Canterbury
Mayor in western Germany in intensive care after stabbing
Australian government pays Deloitte nearly half a million dollars for a report built on fabricated quotes, fake citations, and AI-generated nonsense.
US Prosecutors Gained Legal Approval to Hack Telegram Servers
Macron Faces Intensifying Pressure to Resign or Trigger New Elections Amid France’s Political Turmoil
Standard Chartered Names Roberto Hoornweg as Sole Head of Corporate & Investment Banking
UK Asylum Housing Firm Faces Backlash Over £187 Million Profits and Poor Living Conditions
UK Police Crack Major Gang in Smuggling of up to 40,000 Stolen Phones to China
BYD’s UK Sales Soar Nearly Nine-Fold, Making Britain Its Biggest Market Outside China
Trump Proposes Farm Bailout from Tariff Revenues Amid Backlash from Other Industries
FIFA Accuses Malaysia of Forging Citizenship Documents, Suspends Seven Footballers
Latvia to Bar Tourist and Occasional Buses to Russia and Belarus Until 2026
A Dollar Coin Featuring Trump’s Portrait Expected to Be Issued Next Year
Australia Orders X to Block Murder Videos, Citing Online Safety and Public Exposure
Three Scientists Awarded Nobel Prize in Medicine for Discovery of Immune Self-Tolerance Mechanism
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
×