Next up for retailers: A big wave of gift returns

As shoppers tuck their final Christmas presents under the tree, U.S. retailers are bracing for a record-setting flood of returns of online gifts bought during the deadly surge in coronavirus cases. To make the process more efficient, retailers including Walmart Inc and Target Corp let shoppers drop unwanted gifts at FedEx or United Parcel Service drop-off sites.

Others, including Best Buy, Dick’s Sporting Goods and Nordstrom, are offering curbside returns for the first time as efforts to stop the spread of COVID-19 have shuttered stores or reduced the number of...