We've spent the last two years working with toy brands on a problem most of the industry quietly ignores: what actually happens to toys after they come back.
The answer we kept hearing from brand partners was some version of: "We're not really sure — they go to a liquidator, or we pay to destroy them." That answer kept bothering us. So we decided to dig into the data properly.
Today, we're publishing The State of Toy Returns 2026: Data, Recovery Rates & Waste Impact — our first full research report on the scale, cost, and environmental consequences of toy returns in the U.S. and globally. We pulled from 27 sources and built a picture that, frankly, the industry hasn't put together in one place before.
Here's what we found.
Toy Returns in 2026: The Scale Is Bigger Than Anyone Talks About
The global toy market reached $111.8 billion in 2024. The U.S. alone represents approximately $42 billion in 2025 — the single largest national toy market in the world.
The overall U.S. retail return rate ran at 16.9% of sales in 2024, climbing to 20–25% during the holiday season — when toys make up a disproportionately large share of purchases.
Apply those rates to the U.S. toy market and the math produces a figure somewhere between $6 billion and $9 billion in toys returned annually in the U.S. alone.
Part of why we wrote this report is simply to put that number in writing, because it matters for what comes next.
Most of Those Toys Never Get a Second Life
Roughly half of all retail returns across categories are re-shelved and resold. The rest go to liquidation, donation, or landfill. But for toys specifically, the "donation" pathway is frequently overstated — broken parts, missing batteries, and hygiene concerns disqualify a large portion of returns from charitable redistribution.
The result: research estimates that approximately 80% of all toys — including consumer returns, end-of-life products, and discarded toys — end up in landfills, incinerators, or the ocean. Across all retail categories, Optoro estimates that returned goods generated 8.4 billion pounds of landfill waste in 2023 alone.
The toy industry is also the most plastic-intensive consumer goods sector on earth, consuming an estimated 40 tons of plastic for every $1 million in toy company revenue. Plastic toy components can persist in the environment for up to 500 years.
We're not sharing this to alarm anyone. We're sharing it because the brands we work with — the ones making genuinely premium, durable toys — didn't build products meant for landfill. And their customers feel the same way.
The Carbon Footprint of Toy Returns Is Measurable — and Significant
This is one of the data points in the report that puts the cost of inaction in concrete terms.
A study by Optoro estimated that returned goods in the United States generate an estimated 24 million metric tons of CO₂ annually, with the returns process consuming approximately 1.6 billion gallons of diesel fuel in logistics and transportation. To put that in perspective: it's a figure comparable to the annual emissions of U.S. domestic aviation.
The carbon footprint of a returned product can double or triple compared to its original delivery, because reverse logistics chains are far less optimised than forward delivery. For toy brands shipping bulky, relatively low-margin products, this matters — both as a sustainability metric and as a cost driver.
There is also a less obvious contributor: when a return has no resale plan and the economics of reverse logistics don't justify refurbishment, the rational default is destruction. That costs approximately $5 per returned unit in handling while recovering zero revenue — and generates its own waste stream.
Here's What the Data Shows for Premium Sustainable Toy Brands
This section of the report is the one we're most proud of, because it draws on our own operational data rather than third-party estimates.
For premium sustainable toy brands — partners like PlanToys, Loog Guitars, Way2Play, Janod, Haba, and Ekobo — we consistently see resale recovery of 60–80% of original retail price for returned units in Grade A or Grade B condition.
Compare that to mass-market liquidation, which recovers somewhere between 10–22% of retail value depending on the channel and category.
And compare both to the destroy pathway: $5 per unit in handling cost, zero revenue recovered.
To make this tangible: for a toy with a $40 MSRP, resale through a graded secondhand channel recovers approximately $28 in revenue — versus $6 via bulk liquidation and nothing at all via destruction. The unit economics are not close.
The reason sustainable toy brands perform so well in resale is something we've also documented in the report. Premium wooden and material toys hold up. The most common issue we encounter with returned premium toys isn't the product — it's packaging: a crushed corner on a Janod box, a shifted insert in a PlanToys set. The toy is functionally perfect. We reclassify it as Grade B, list it at a modest discount, and it sells — often faster than equivalent mass-market items, because buyers are actively searching for these specific brands.
That is secondhand brand equity, and it compounds.
The Secondhand Toy Market Is Already Substantial — and Growing Fast
Sustainable toy brands sometimes wonder whether there is real demand for pre-loved premium toys. The data answers that question clearly.
The toy collectibles secondhand market was valued at $19.2 billion in 2024 and is projected to reach $45.2 billion by 2032, growing at a compound annual rate of 10.6% — faster than new toy sales growth (Verified Market Research).
The broader global secondhand products market was valued at $186 billion in 2024 and is projected to surpass $1 trillion by 2035, growing at a CAGR of 17.2% (Transparency Market Research).
The customers who already buy premium sustainable toys are exactly the customers most likely to seek out — and trust — a brand-authenticated resale product. That's a demand signal brands shouldn't leave on the table.
The Regulatory and Commercial Window Is Narrowing
If the commercial case above isn't compelling enough, regulatory pressure is building quickly and from multiple directions.
The EU's Ecodesign for Sustainable Products Regulation (ESPR) is expanding its scope to cover toys. Extended Producer Responsibility (EPR) legislation is advancing across multiple U.S. states, requiring manufacturers to take greater responsibility for the end-of-life stage of their products. And consumer expectations around brand sustainability are increasingly reflected in purchasing behaviour — not just surveys.
Brands that have a credible reverse logistics and resale strategy in place will be in a materially better position — on compliance, on brand equity, and on margin — than those that don't. We believe 2026 is a year where early movers will build structural advantages that are difficult to replicate later.
Read the Full Report
We compiled 27 sources — including data from the National Retail Federation, MDPI Sustainability, Optoro, the Toy Association, Transparency Market Research, and Verified Market Research — into a detailed analysis covering nine data sections with original charts and datasets.
If you work in the toy industry, manage a sustainable toy brand, or care about what happens to products after they leave your warehouse, we think it's worth your time.
👉 Read The State of Toy Returns 2026
What Toycycle Can Do for Your Brand
If the data above resonates with you, we'd love to talk.
Toycycle is a Resale-as-a-Service platform built specifically for sustainable toy brands. We handle the full returns and resale lifecycle — inspection, grading, refurbishment, photography, listing, fulfilment, and reporting — so your team doesn't have to build any of that infrastructure in-house.
Our brand partners, including PlanToys, Loog Guitars, Way2Play, Janod, Haba, Ekobo, and PJM Distributions, are already recovering 60–80% of original retail value on returned and overstocked inventory. That's revenue that previously went to liquidators or landfill.
If you're ready to turn your returns into a resale revenue stream, talk to us at brands.toycycle.co.