There are certain avatar items each festival that become impossible to sell because of how common they are. Simply deleting items you fought bosses to earn is somewhat painful, so some of us end up filling up pages of inventory hording items we can't sell, can't use, and can't bring ourselves to delete.
I propose:
A) Adding coin prices to festival items so you can just sell them to the system,
B) Allowing players to break them down into festival-appropriate tokens, or,
C) Add a barter system to the wardrobe with point values for each item (a few hundred, perhaps, for lesser items and into the thousands/tens of thousands for rarer ones), with recycling avatar items being the sole way to earn points to unlock ones from the wardrobe.

That last one might undermine the prestige of the ancient and impossible-to-get avatar items, but at this point there are a lot of them that players just cannot obtain anymore. I know that would be a controversial decision and certainly the most complicated option, but I had to throw it out there.