EU Ban Targets Write-Offs of Returned Retail Stock
Large retailers and brands selling into the EU must redirect returned stock away from destruction, including recycling, under the ESPR.
Updated on Nov. 2, 2026 in Retail
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Retailers write off, destroy, or discard up to 40% of returned stock, according to research from ReBound Returns and Advanced Supply Chain. The findings arrive as the EU's Ecodesign for Sustainable Products Regulation (ESPR) bans destruction of certain unsold consumer goods for large retailers and brands selling into the EU, effective 19 July.
Why it matters
The ESPR introduces new requirements around the sustainability and circularity of products across their lifecycle, and it classifies recycling as a form of destruction alongside landfill and energy recovery. Retailers and brands selling into European markets face mounting pressure to reduce write-offs of returned stock rather than default to disposal.
Surveyed retailers report write-off rates of up to 40% of returned stock, with a survey average of 11.7%. In an illustrative case of 100,000 annual returns at an average £106 per item, write-offs alone would cost about £1.24 million.
The details
Returned stock can be resold, reused, refurbished, donated, or recycled, which are the circular routes retailers use to keep goods out of waste. Under the ESPR, however, recycling counts as destruction, so only resale, reuse, refurbishment, and donation fall outside the ban's scope for certain unsold goods. Retailers that rely on write-off as a default disposal route will need to shift their returns processing toward these alternatives.
Timeline
19 July: ESPR ban on destruction of certain unsold consumer goods takes effect for large retailers and brands selling into the EU.
Market Landscape
The ESPR's ban on destruction of certain unsold consumer goods applies to large retailers and brands selling into the EU, placing European market requirements at the center of returns handling. Current practice shows a wide gap, with only 27% of retailers diverting more than three-quarters of returns through circular routes.
Retailers and brands selling into the EU should review returns workflows and calculate how much of their returned stock is currently written off against the ESPR ban. Operations, procurement, and finance teams should map resale, refurbishment, and donation channels to reduce write-off exposure.
The takeaway
Retailers should treat returns as a recoverable asset class and file a returns-diversion metric against the ESPR ban, which takes effect 19 July. Teams that track the share of returns moving through resale and refurbishment will be best positioned if EU pressure on write-offs tightens further.
Further reading
For broader context on how retailers manage inventory and returns, see the Retail section.
Source note: This article includes information reported by FashionNetwork.
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