New research from ReBound Returns and Advanced Supply Chain has revealed the scale of the challenge facing retailers as new EU regulation raises the stakes around how unwanted stock is managed.
Half of retailers (50 per cent) report that between 6 and 40 per cent of returned items are ultimately written off, destroyed or discarded without value recovery, while only 27 per cent divert more than three-quarters of returns through circular routes such as resale, reuse, refurbishment, donation or recycling.
The findings come as the EU’s Ecodesign for Sustainable Products Regulation (ESPR) introduces new requirements around the sustainability and circularity of products across their lifecycle. Since 19 July 2026, the regulation includes a ban on the destruction of certain unsold consumer goods, including apparel, footwear and textile accessories, for large retailers and brands selling into the EU market.
For retailers and their returns teams, the findings highlight the operational challenge of moving from circularity strategies to consistent recovery of returned stock.
The research shows that many retailers already have processes in place to measure and improve the environmental performance of returns. Some 88 per cent report some level of environmental measurement across returns, while the same proportion have standardised or optimised efforts to improve the sustainability of returned items through resale, reuse, refurbishment and recycling.
However, this is not consistently translating into high levels of diversion from disposal. Some 44 per cent of retailers divert half or less of their returned stock through circular routes, while only 27 per cent divert more than three-quarters.
The commercial implications are significant. Based on the survey-average write-off rate (11.7 per cent), a retailer processing 100,000 returns a year could see around 11,700 items generate no value at all. At an average value of £106 / €124 per returned item, this would represent approximately £1.24m / €1.45m in lost value from write-offs alone.
Inge Bujakiewicz-Baars, Head of Sustainability at ReBound Returns, said: “While ESPR is EU law, its reach extends to large retailers and brands selling into the EU, making it an important consideration for businesses operating across European markets.
“Preparing for ESPR means understanding what happens to products once they come back, mapping the available routes for each product category and putting clear reporting and governance around those decisions.
“One area that deserves particular attention is recycling. 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. That places greater emphasis on higher-value circular routes such as resale, reuse, repair and donation.”
Stuart Greenfield, UK & European Sales Director at Advanced Supply Chain, said: “Returns have traditionally been managed around cost, capacity and operational efficiency. Regulation is adding another consideration: what happens to the product itself when it comes back.
“The data shows that retailers are already investing in measurement and circular processes, but a significant proportion of returned stock is still not being recovered through a circular route.
“The opportunity is to assess every returned item according to its condition, value and potential next destination. For some products that will mean resale, while others may be suitable for refurbishment, repair or donation.
“As the regulatory requirements develop, retailers will need greater visibility of returned inventory and clearer decision-making around its next route. That can help reduce disposal while also recovering more of the value tied up in returned stock.”
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