January has long been a pain point for retailers. Known as “Returnuary” in the industry, the month sees a surge in product returns, particularly items from holiday sales. This year, brands are doubling down on resale strategies to mitigate losses and extend the lifecycle of returned goods.
According to the National Retail Federation’s December report, returns are projected to account for 17% of all merchandise sales in 2025, amounting to $890 billion worth of merchandise — a significant increase from 2023’s 15% rate and $743 billion.
And with a new sustainability-averse administration under way under President Trump, resale could prove one of the only sustainable fashion practices that isn’t affected.
For accessories brand Hobo Bags and womenswear label M.M.LaFleur, the post-holiday returns flood has been both a challenge and an opportunity.
“Resale has been a game changer for us,” said Kayla Moore, vp of marketing at 35-year-old Hobo Bags. The brand has integrated resale powered by resale program platform Archive into its returns process, offering it as an alternative for items that don’t qualify for standard returns. Hobo Bags accepts returns and exchanges of new and unworn merchandise within 30 days of purchase, with a $7 handling fee deducted from the refund. The strategy includes training the company’s customer experience team to direct customers to Hobo’s resale program, now prominently featured in its returns FAQ. This shift not only reduces product write-offs, but it also appeals to consumers looking for more affordable options.
Similarly, M.M.LaFleur has leaned heavily on resale to combat the spike in returns. “During the holiday season, our damage rate increases by about 2 percentage points,” said Kartinah Smith, the company’s director of operations. To address this, M.M.LaFleur rehabilitates returned items for resale. This process ensures that even lightly damaged goods find a second life, reducing waste and generating revenue. In fact, 80-90% of the brand’s resale inventory originates from returns.
M.M.LaFleur’s resale journey began with peer-to-peer platforms like Poshmark, but it transitioned to an in-house model in 2021 to better control the process. It launched its damages program in 2024. “Previously, we struggled with piles of unsellable inventory in our warehouse,” Smith said. “Now, we’re able to sustainably offload these items, reach more customers and even create a stronger emotional connection with our audience.”
The brand’s Second Act resale platform which also used Archive technology has seen consistent growth, with units sold per month increasing by 11% since its launch. “What’s exciting is the diversity of our resale shoppers,” said Smith. “Many of them are priced out of our mainline collection or prefer to shop secondhand for environmental reasons.”
For M.M.LaFleur, about 30-40% of refurbished items sell within the first two months of listing. Within six months, the sell-through rate climbs to 60%. “What doesn’t sell is eventually discounted further or donated,” said Smith.
Hobo Bags has similarly embraced the resale trend, but with a focus on customer convenience. Its 400,000-strong email list receives regular updates about resale opportunities, which drives traffic to the program without aggressive marketing spending. “We want to make resale feel like a seamless extension of the brand,” Moore said.
In addition, Hobo Bags has prioritized awareness over direct revenue. “We see our resale program as a long-term investment in customer loyalty and sustainability,” said Moore. The brand declined to share specific revenue figures.
Both brands are experimenting with hybrid sales models to drive awareness and adoption of resale. For its part, M.M.LaFleur has introduced curated resale racks in select stores, offering shoppers the chance to rediscover popular past-season items. “The in-store experience is incredibly valuable,” Smith noted. “Customers love finding items they missed years ago.”
On the digital front, M.M.LaFleur plans to increase its marketing investment in resale in 2025 to diversify traffic sources beyond its main website. Currently, 82-88% of the resale inventory doesn’t overlap with mainline offerings, reducing fears of cannibalization.
“We’re testing paid marketing to bring in new customers who might start with resale and eventually shop our main collection,” Smith said.
As returns continue to rise, resale is emerging as a strategy for brands to manage the financial and environmental costs of excess inventory. “Returns are inevitable, especially during the holidays,” said Moore. “But by integrating resale, we’re turning what used to be a liability into a win-win for the business and the customer.”
