Today, Manhattan Associates Inc. (NASDAQ: MANH) announced the findings of a new study revealing that UK retailers will face a £1.05 billion returns challenge post-Christmas, with consumers expected to send back an estimated 52 million gifts. Whilst overall return rates have decreased – from 43% to 33% of consumers year-on-year – the total value remains substantial. On average, the value of a returned gift is £57.
“The sheer scale of gifts being returned this year underscores the immense logistical and financial pressure on retailers after the festive season,” said Martin Lockwood, Senior Director, Manhattan Associates. “The returns cycle remains a critical factor in building long-term trust and loyalty between UK businesses and their customers. This demands systems and processes that can recover value, while maintaining consistent, positive shopping experiences.”
Hybrid shopping habits
The research showed a significant shift towards hybrid shopping, with most consumers preferring a blend of in-person and online experiences. Almost one in three people (31%) planned to shop half in-store and half online and over a quarter (26%) said mostly in store but partly online. Only a small minority (5%) intended to do 100% of their shopping online, signifying a rebound from the immediate post-COVID pandemic years when ecommerce spend rocketed.
These intentions varied significantly by generation. Those aged 65+ were more than twice as likely to plan to do all their shopping in person (23%), compared to just 10% of those aged 18-24. This generational divide between Gen Z and Boomers causes added complexity for brands who need to manage returns seamlessly across multiple channels while meeting varied customer expectations.
Clothing and footwear dominate returns
When it comes to the gifts themselves, some items consistently miss the mark. The study found that clothing (returned by 39% of consumers) and shoes/footwear (37%) continue to top the list for most-returned Christmas presents. Clothing was also number one on the list last year, at 42%, but there was a noticeable surge for footwear returns in 2025, jumping up from 21%. Jewellery or watches (12%) and cosmetics (12%) also feature prominently.
The importance of the human touch
While the very best digital assistants are already able to provide excellent, accurate conversational experiences to customers, the research reveals a significant opportunity for brands too, as they look to navigate AI and automation in customer experience.
The data shows four in five people (81%) in the UK still prefer a human store associate to support them with returns over a digital assistant, with trust emerging as the decisive factor, and 7 in 10 people (70%) citing it as their primary reason for this preference.
These findings underscore the continued importance of a blended approach to customer experience, where the use of technology augments, rather than replaces the role human associates.
Generational divide in returns
Generational differences are stark when it comes to returning gifts. Those aged 65+ are the least likely to return their presents, with almost 9 in 10 (87%) claiming not to have returned any gifts last Christmas. In contrast, shoppers aged 18-24 are the most prolific returners, with over half (53%) admitting to returning at least one gift last Christmas. These highlight varying attitudes and behaviours towards retail in general across age groups, reflecting different shopping patterns and expectations.
A balancing act for retailers
“Retailers are stuck with competing pressures in the wake of the Christmas period,” says Lockwood. “This year, we’re seeing a real clash between consumer expectations which often lean towards seamless, free, and convenient returns, and the operational realities for businesses, including the cost of processing returns and reintroducing and reselling (previously unwanted) inventory.”
