Gift-giving is supposed to create joy. Yet the modern system surrounding it reveals something far more troubling, not just for consumers, but for the entire retail industry. What appears to be a cultural quirk is, in reality, a structural failure in how commerce understands demand.

For decades, retail has optimized one thing exceptionally well: how people buy for themselves. Search engines capture intent, advertising platforms track behavior, and social channels amplify influence. Hundreds of billions have and continue to be spent on refining how retailers identify, target, and convert individual shoppers.

But gifting is one category of commerce where that entire system breaks down. And the reason is simple: retail has been looking at the wrong person.

In a traditional transaction, the buyer and the user are the same. But in gifting, they are not. The buyer is making a decision on behalf of someone else, yet retail systems treat that buyer exactly the same as any other customer. That assumption creates inefficiency at every level, from marketing spend to conversion rates to returns.

Retailers today track almost everything. They know what customers click, browse, abandon, and eventually purchase. Yet there is one critical signal that does not exist at scale: what people actually want as gifts.

The result is a multi-billion-dollar drain hiding in plain sight. According to retail return research, the value of merchandise returned in the United States reached nearly $850 billion in 2025. A report by Gitnux estimates that handling a single online return can cost retailers between $30 and $50. For many retailers, January does not represent growth; it represents reversal, with waves of returns eroding margins built during the holidays.

Processing those returns is not trivial. Each one carries logistics costs,........

© International Business Times