Used pyjamas and rotten fruit among most disappointing Christmas gifts – survey

A Which?-commissioned Deltapoll of more than 2,000 UK adults in January 2025 found that 21% received an unwanted or unsuitable gift at Christmas 2024. Recipients reported handling those gifts by keeping and using them (33%), keeping but not using (15%), or disposing/re-gifting/selling them (34%), while only 1% gave unwanted items back to the giver and 2% threw them away; retailers commonly extend festive return policies but often require proof of purchase. The data highlights modest but meaningful post-holiday flows into returns, secondary marketplaces and charity channels, and suggests incremental operational and refund costs for retailers during the season.

Analysis

Market structure: The Which? survey (21% received unwanted gifts; 34% disposed) implies meaningful incremental post-holiday flows to secondary channels and reverse logistics. Winners: resale/marketplace platforms (EBAY, ETSY), logistics carriers/fulfilment (UPS, FDX, AMZN), and gift-card/payment processors (V, MA) that monetize non-cash returns; losers: mall-based and high-return fashion retailers (M, JWN, KSS, ASC.L) with weaker return economics and margin sensitivity. Expect pricing power to shift toward marketplaces and logistics providers who can monetize returned/used inventory.

Risk assessment: Immediate tail risks (days–weeks) include fraud spikes and chargeback/backlog costs during the January return surge; short-term (Q1 2025) risks are margin hits for retailers and volatile earnings guidance; long-term (2025–27) regulatory risks include stricter return/consumer-rights laws that raise reverse-logistics costs by an estimated mid-single-digit percentage of sales for vulnerable retailers. Hidden dependencies include payment/receipt policies that constrain direct refunds (increasing marketplace/resale flows) and international cross-border return costs that compress margins.

Trade implications: Expect outperformance of listed resale marketplaces and parcel carriers over the next 3–9 months as disposal/relist volumes rise; conversely, expect credit and equity pressure for high-return discretionary retailers into Q1 FY2025 earnings. Use directional equity and relative-value pair trades (marketplace long / department-store short) and short-dated option structures to capture the January–March returns tail and Q1 guidance risk.

Contrarian angles: The market may underappreciate structural upside to resale and reverse-logistics — even a 3–5% permanent shift of post-holiday flows to second-hand channels materially boosts EBITDA for low-capex platforms. Conversely, retailers that invest proactively in frictionless returns (gift receipts, omnichannel returns) could regain share — creating dispersion opportunities between proactive leaders (invest to keep customers) and laggards (tighten policies and lose customers).

Key Decisions for Investors

• Establish a 2–3% portfolio long split between EBAY and ETSY (1–1.5% each) within 2 weeks to capture expected 5–12% upside into Q2 2025 from higher resale volumes; set a hard stop-loss at -10% and trim 50% into Q2 FY2025 earnings beats.
• Initiate a 1.5–2% long position in UPS (UPS) or FDX to play incremental reverse-logistics volume; alternatively buy a June 2025 1:1 call spread ~15% OTM to cap cost and target 20–40% return if volumes persist; exit or reassess post Q2 2025 results.
• Enter a pair trade: long EBAY (1.5%) / short Macy's (M) or Kohl's (KSS) (1.5%) through May 2025 to capture margin divergence; tighten short if buybacks or free-return investments are announced, and place stop-losses at 8% on either leg.
• Reduce exposure to high-return fashion pure-plays (e.g., ASOS ASC.L, fast-fashion peers) by 40–60% within 30 days; redeploy proceeds to marketplaces/logistics or cash — reassess after retailer Q1 2025 margin guidance.
• Monitor UK/EU consumer-rights and retailer return-policy announcements over the next 60–90 days; if draft regulations mandate free/extended returns, increase short exposure to leveraged mall retailers by another 2–4% due to expected 3–7% incremental cost pressure.