The State of Toy Returns 2026: Data, Recovery Rates & Waste

Every January, a familiar ritual plays out in homes across the world. Wrapping paper is long gone, the novelty has faded, and a stack of toys — wrong size, duplicate gifts, broken on arrival, or simply unwanted — begins its journey back to the retailer. After the return receipt prints, a new journey begins — one the toy industry doesn't often reveal. This report compiles the latest publicly available data on toy returns 2026, recovery rates, and environmental impact. It is intended as a resource for researchers, parents, retailers, sustainability advocates, and anyone thinking seriously about what happens to the $111 billion worth of toys sold globally each year.

1. The Scale of the Toy Market

To understand the waste problem, you first have to understand the scale of production.

The global toy market reached approximately $111.8 billion in sales in 2024, a 3% increase over 2023, according to the Toy Association's Global Sales Data. Multiple independent market research firms place the figure between $108 billion and $115 billion, making toys one of the largest consumer goods categories in the world. The United States alone is the single largest national market, with estimated revenues of $42 billion in 2025 (GM Insights, 2025).

Growth shows no signs of slowing. The market is projected to expand at a compound annual growth rate (CAGR) of between 4% and 6.6%, reaching anywhere from $161 billion to $224 billion by the mid-2030s. A growing "kidult" segment — adults purchasing toys for themselves — now accounts for approximately 17.3% of U.S. toy sales, contributing around $6.7 billion annually (IMARC Group, 2024). More toys sold means more toys returned, and more toys returned means more toys that need somewhere to go.

2. How Many Toys Get Returned?

Precise, toy-category-specific return rate data is not publicly released by major retailers or industry associations. The National Retail Federation (NRF) reports aggregate figures across all retail categories. However, we can construct a reliable estimate using available data.

Retail Return Rates: 2019–2025

The NRF and Happy Returns reported that U.S. retail returns totalled $890 billion in 2024, representing 16.9% of all annual sales — more than double the pre-pandemic rate of 8.1% reported in 2019. For 2025, the NRF forecasts approximately $849.9 billion in returns, or 15.8% of sales.

Return Rates by Channel and Season

E-commerce returns are substantially higher than in-store. Online purchases in 2025 carry an estimated return rate of 19.3%, compared to lower rates for in-store transactions (Capital One Shopping Research, 2026). During the holiday season — when toys represent a disproportionate share of purchases — return rates reach 20–25% of merchandise sold (NRF, 2024; Cross-Border E-Commerce Magazine, 2025).

3. What Happens to Returned Toys?

The return journey for a toy rarely ends cleanly. Once a product leaves the customer's hands, it enters the reverse logistics chain — expensive, inefficient, and, for many product types, environmentally damaging.

A growing number of major U.S. retailers — including Amazon and Target — now offer customers a refund while allowing them to keep the item rather than return it. For low-cost toys, this is economically rational: the reverse logistics cost can represent up to 30% or more of the item's original price (Optoro). The environmental consequence is that items with no resale plan become household waste.

4. The Environmental Cost of Toy Returns and Waste

Plastic: the toy industry's defining material problem

Approximately 90% of the world's new toys contain some form of plastic. The toy industry has the highest plastic intensity of any consumer goods sector, consuming an estimated 40 tons of plastic for every $1 million in toy company revenue (The World Counts; Yale Environment Review). Plastic toy components can persist in the environment for up to 500 years.

Carbon emissions from toy returns and reverse logistics

A study by Optoro estimated that returned goods in the United States generate 24 million metric tons of CO₂ annually, with the returns process consuming approximately 1.6 billion gallons of diesel fuel. The carbon footprint of a returned product can double or triple compared to its original delivery journey, because the reverse logistics chain is far less optimised than forward delivery (CleanHub, 2024).

The case for wooden and alternative-material toys

A 2025 peer-reviewed life cycle assessment published in Sustainability (MDPI) found that replacing plastic toy cars with wooden equivalents could reduce greenhouse gas emissions per toy by 77% across the product lifecycle. Wooden toys also outperformed plastic in 9 out of 14 environmental impact categories.

Source: MDPI Sustainability (2025). Note: wooden toy advantage assumes sustainably sourced timber.

5. Recovery Rates: What's Actually Being Recaptured?

Industry take-back programs

The recycling ceiling

The Recycling Partnership's 2024 State of Recycling Report found that only 21% of recyclable material is actually captured in the U.S. recycling system, with 76% of recyclables lost at the household level. For toys — which are not accepted in most curbside recycling programs — the practical capture rate is almost certainly lower than this already-low baseline.

The secondhand toy market opportunity

The global second-hand products market was valued at $186 billion in 2024 and is projected to reach over $1 trillion by 2035, growing at a CAGR of 17.2%. The toy segment within secondhand collectibles is the fastest-growing sub-segment. The toy collectibles market alone was valued at $19.2 billion in 2024, projected to reach $45.2 billion by 2032 at a CAGR of 10.6%.

6. The Regulatory and Industry Horizon

The pressure on toy companies to address their environmental footprint is building from multiple directions. The Toy Association reaffirmed in October 2024 that there is "an industry-wide understanding that everyone has a role to play in support of sustainability," while noting that toys represent "less than 1% of the typical household waste stream." Critics note that this 1% figure refers to volume, not environmental impact — and that the plastic intensity and non-recyclability of toys means their impact is disproportionate.

7. Expert Opinion: What We See Managing Returns for Sustainable Toy Brands

The Premium Sustainable Toy Returns Problem Is Different

The industry-wide data in sections 2–5 describes the aggregate retail landscape, dominated by mass-market plastic toys. But the returns profile for premium, sustainably made toys is strikingly different, and the aggregate figures mask a critical insight: the higher the product quality, the higher the recoverable value from returns.

When a mass-market plastic toy is returned, it frequently cannot be resold — packaging is destroyed, batteries are missing, small parts are lost, and there is no meaningful secondhand market. The economics of reverse logistics (up to 30% of the original item price per Optoro) make liquidation or destruction the rational choice. The toy becomes a statistic in the landfill data above.

When a Haba wooden pull toy, a PlanToys rubberwood kitchen set, or a Loog Mini Guitar is returned, the dynamics are fundamentally different. We consistently see resale recovery of 60–80% of original retail price for returned units in Grade A or Grade B condition from our sustainable brand partners.

Partner Spotlights: What Returns Actually Look Like

Three Patterns We Consistently Observe

1. The packaging problem outweighs the product problem. Across virtually all of our premium brand partners, the product arrives in resaleable condition far more often than mass-market benchmarks would predict. What creates "return friction" is almost always packaging: a crushed corner on a Janod box, a missing hang-tag on a PlanToys unit, or a Haba game where the insert has shifted in transit. In all these cases, the toy is functionally perfect. Our process reclassifies these as Grade B, photographs them accurately, and lists them at a modest discount — and they sell. Premium toy returns are primarily a presentation problem, not a product problem.

2. Sustainable brands carry secondhand brand equity. Loog, PlanToys, Haba, and Janod are brands that sustainability-conscious parents already know and trust. When we list these items on secondhand channels, the brand does the selling for us. Our average time-to-sale for Grade A returns from these partners is materially shorter than for equivalent-priced mass-market items, because buyers are actively searching for these specific brands. This is secondhand brand equity, and it compounds over time.

3. Overstock and samples are the underexplored return stream. Consumer returns are the most visible part of the reverse logistics challenge, but for our brand partners, overstock and samples are often a larger volume opportunity. Tytan Toys and PJM Distributions route significant volumes of new or near-new overstock through our platform. These units require no refurbishment, and recover close to full retail price. This is not a loss-recovery mechanism — it is a margin-neutral (or better) channel.

Returns Are an Asset, Not a Cost

The dominant industry response to returns has been to reduce cost — faster inspection, cheaper logistics, automated disposition. This is rational but incomplete. For premium, sustainably made toys, the more important variable is value recovery, and the two are not the same thing.

A toy that is destroyed in a cost-reduction process saves $4 in handling. A toy that is graded, photographed, and listed on a secondhand channel recovers $18–$40 in revenue. The arithmetic is not difficult — but it requires a fundamentally different infrastructure than the one most toy brands have built.

9. Frequently Asked Questions About Toy Returns and Waste

© 2026 Toycycle. This report may be freely cited with attribution. Please link to the original URL at toycycle.co.