There are many companies that do this and send the children letters back from “Santa” free of charge, regarding random letters sent out and even those to companies they’re unfortunately sent to the recycling bin. An idea to tell kids is that they’re mixed up with magic elf dust and given to the reindeers to eat as that what makes them fly.
And yes, I like the elf dust idea, and it's one which I wish i'd thought of, however I was put on the spot at the time and came up with the first thing that entered my head that sounded reasonably plausible.