Half of Retailers Write Off Up to 40% of Returned Stock

Half of retailers write off, destroy or discard between 6% and 40% of the items customers send back, according to new research from ReBound Returns and Advanced Supply Chain. The survey-average write-off rate sits at 11.7% — and at an average value of £106 (€124) per returned item, that is real money evaporating at the dock door.

Scale it up and the arithmetic gets uncomfortable fast. A retailer processing 100,000 returns a year can expect around 11,700 of those items to generate no value at all. Write-offs alone, on those figures, represent roughly £1.24 million (€1.45 million) in lost value annually. This is not a rounding error in the returns budget; it's a material stream with a seven-figure price tag attached.

The findings form part of the companies' Circularity Index research, which tracks how retailers manage both the environmental and commercial value of returned products as circularity shifts from talking point to operational and regulatory priority.

How much of the waste actually gets diverted?

Not much, on the evidence. Only 27% of retailers divert more than three-quarters of their returns through circular routes — resale, reuse, refurbishment, donation or recycling. At the other end, 44% divert half or less of their returned stock away from disposal.

The gap sits between measurement and throughput. The same research found 88% of retailers report some level of environmental measurement across their returns operation, and the same 88% have standardised or optimised efforts to improve the sustainability of returned items through resale, reuse, refurbishment and recycling.

So the systems exist on paper. They're just not consistently translating into high diversion rates. ReBound frames the core finding as an operational challenge: moving retailers from circularity strategies to consistent, measurable recovery of returned stock. In plain terms, most of the sector can count its returns problem but hasn't solved it.

Why does the EU's ESPR change the calculus?

The timing is not accidental. The EU's Ecodesign for Sustainable Products Regulation (ESPR) introduces new requirements around the sustainability and circularity of products across their lifecycle. From 19 July 2026, the regulation bans the destruction of certain unsold consumer goods — including apparel, footwear and textile accessories — for large retailers and brands selling into the EU market.

That deadline turns a commercial inefficiency into a compliance question. Retailers selling into the EU have under two years to rebuild how returned and unsold stock moves through their networks, or find themselves on the wrong side of a destruction ban.

Inge Bujakiewicz-Baars, Head of Sustainability at ReBound Returns, flagged a subtlety that many returns teams will need to absorb: "While retailers are using recycling as one of their circular routes, under ESPR, recycling is actually classified as a form of destruction alongside landfill and energy recovery."

Her second point sharpens the operational consequence: "That places greater emphasis on higher-value circular routes such as resale, reuse, repair and donation."

Read that carefully. Recycling — the route most retailers already run — won't count as circular under the new rules for the products in scope. A returns operation that leans on fibre recovery or downcycling to hit its diversion numbers will need resale, reuse, repair and donation capacity instead, at far higher volumes than the current 27% high-diversion cohort manages today.

What happens next?

The numbers frame the task. Half the sector is writing off up to 40% of returns now; from 19 July 2026, writing off apparel and footwear by destruction stops being an option for large EU-market sellers. The milestone that decides what happens next is the ESPR ban's arrival — and whether the 88% who measure the problem become the retailers who actually divert the tonnage.