With holiday season over and most of the purchases done, now comes the time when consumers are expected to return holiday purchases. And to make it worse, this time it will be more than the usual.

Returned merchandise in 2008 is expected to make up 8.7% of overall sales, up from 7.3% in 2007, according to retail trade group National Retail Federation.

It will be weeks before most retailers disclose the size of their holiday returns. However, a survey of 1,000 shoppers conducted on Christmas found a whopping 86% of parents said that if their children didn't love their gifts, they would take them back for a refund or exchange, says America's Research Group, a consumer research firm.

The Charleston, S.C., firm predicts returns and exchanges during the week after Christmas would rise 50% over the same period a year earlier.

Another reason that analysts expect higher return rates is that some retailers relaxed their return polices this year to boost their appeal to jittery consumers. More than half of the 82 major retailers that the NRF surveyed in November said their holiday return policies were more lenient this season. In 2007, that was the case for only 35% of retailers that the NRF surveyed.

J.C. Penney Co., for example, allows returns for customers without a receipt if they present the credit-card used to make the purchase. Target Corp. gives customers gift cards for items up to $35 without a receipt, up from $20 last year.

CBSNews also carried a segment on Retail Returns, check the video below:

So what do Retailers do in such a scenario? Multichannel Merchant has a list of do’s and don’ts on exactly the same, Making the Most of Retail Returns.

Related: Stores loosen policies to make it easier to return holiday gifts