New data from ecommerce marketing company Omnisend shows that order returns in the post-Christmas week in Canada jump 39% above the average week. The surge isn’t evenly distributed: it’s concentrated in high-gifting categories where fit, specs, and personal preferences are easiest to miss.
Biggest Post-Christmas Return Spikes by Category
Biggest post-Christmas return spikes by category (vs. average week in 2025):
Apparel: +39%
Games: +19%
Pets & animals: +19%
Beauty & fitness: +15%
Why Gifting Categories Drive Returns
Marty Bauer, ecommerce expert at Omnisend, said: “Gifting clothes is always a gamble. Even when shoppers know someone well, fit, cut, and comfort are hard to predict, which naturally leads to exchanges after the holidays. “The same goes for beauty and fitness, where shade and skin compatibility matter just as much as brand loyalty to familiar, go-to makeup brands.”
“Pet products often come down to fit and preference (think harness sizing, dietary restrictions, age appropriateness, or duplicates), whereas games are usually returned due to duplicates or platform compatibility in the case of video games.”
Turning Returns Into a Customer Loyalty Opportunity
“Although returns can be logistically problematic for retailers, they can also present an opportunity to strengthen relationships with customers. Brands that make returns painless and steer shoppers toward exchanges can turn the busiest return week of the year into long-term loyalty.”
Apparel Remains the Highest-Risk Category
Bauer said apparel always has high return rates due to several factors, such as bracketing, improper sizing, in-style trends, and quality.
“While many of these things remain true year-round, the holidays add personal preference to the list. Apparel is a common gift, but too often recipients don’t like the item or suffer from one of the other issues, such as improper sizing,” he said.
Why Games Are Frequently Returned
“With games, we don’t really know 100%. It may be a combination of several things, the first being whether recipients actually want the game. It’s not uncommon for someone outside of the immediate household to purchase a game that does not align with the recipients’ interests. Second, video and board games are often duplicated, requiring recipients to return the item. Third, it may be a matter of receiving the wrong product. They may want controller X but receive controller Z instead.”
Value-Conscious Consumers Are Driving Higher Returns
Bauer said returns, especially post-holiday, are not a new phenomenon.
“The increase we see this year may have more to do with the fact that people are being more diligent about their wants and needs as they prepare for belt-tightening in the new year. Maybe in years past someone may have kept or regifted the unwanted sweater, but they are less willing to lose the value of that gift, instead choosing to return the item for something they want or need,” he said.
The Rising Cost of Returns for Retailers
“The added cost of original and return postage (especially for cross-border shipments), warehousing, logistics, and personnel all add up and affect the bottom line. Many items are not resellable once returned, meaning it can add even further costs to dispose of those products.”
How Retailers Are Using Data and AI to Reduce Returns
Bauer said for years retailers have been using data or AI tools more effectively to reduce preventable returns in high-risk categories such as apparel and beauty and continue to improve upon their capabilities, recognizing returns will always be present.
“It’s a part of retail. The tools retailers are using include more accurate size charts, consistent measurement guidelines from their manufacturers, model descriptions in the product details, 3D product images, and virtual try-ons, to name a few,” he said.
“The goal with these features is to consistently reduce return rates, not eliminate them.”
Looking Ahead to the 2026 Holiday Season
Looking ahead to the 2026 holiday season, what practical steps should Canadian retailers take now to balance generous return policies with profitability and sustainability?
“One option is to offer a small discount in exchange for the consumer waiving their free return option. Another is to charge a slight restocking fee for returns, although this is increasingly turning off shoppers from stores, so tread carefully,” explained Bauer.
“Brands should also implement post-purchase emails to customers, not to sell products, but to earnestly ask how their order was. This provides an opportunity for customer service to head off potential issues before they result in returns. Of course, work on making product detail pages as accurate and helpful as possible. This is one area where AI can analyze return patterns based on factors such as sizing, which can inform the type of data to include on product pages.”
More from Retail Insider:
