The National Retail Federation says that $218 billion of merchandise was returned last year. Retailers incur over $170 million in returns for every $1 billion of items they sell.

The online shopping boom led to more returns due to consumers getting used to ordering multiple sizes and colors. Retailers can run their stores on the platform Customers have been conditioned by the e- commerce giants to expect a fast, simple and free return process, regardless of who the seller is.

Retailers spend a lot of money on returns because of those new habits. While they work on making it easier for the customer to return merchandise, the underlying problem is actually operational deficiencies.

The Philadelphia-based company provides returns management software for e-Commerce brands and Retailers, bringing together technology, including customer relationship management, third-party logistics, inventory management and shipping all together under one umbrella. It is possible for users to plug in ReturnLogic's APIs and access data they can use to make product, process, manufacturing, and procurement changes to improve their bottom line.

Peter Sobotta is the founder and CEO of Return Logic. Over the past five years, he began to pay attention to the new generation of modern e-commerce companies. They had a constant focus on data and lifetime value, but they couldn't get that.

Everyone did, the wave hit. Retailers are taking returns a lot more seriously. When it comes to investment, dollar for dollar, if you have a place to park money right now and you're trying to trim costs, but you have a 30% to 40% return rate, investing $1 in returns goes straight to the bottom line.

Over the past seven years, Return Logic has processed over half a billion returns and served hundreds of online brands and retailers. Third-party warranty returns are also handled by it.

The company received $8.5 million in Series A funding from an investor group led by Mercury, with participation from Revolution's Rise of the Rest Fund, White Rose Venture and Ben Franklin Technology Partners. ReturnLogic has a total of $11 million in equity.

According to Blair Garrou, managing director of Mercury, most of the returns software is focused on getting customers to exchange products rather than other ways of returning, for example, if there is a warranty issue.

He said that young direct-to-consumer brands don't know when they've hit operational inefficiency with returns until they reach a certain amount of revenue. It was not until I spoke to Peter that it became clear to us. The market is maturing into a place where capacity planning and understanding long-term value for customers are important. The pulse of that is being watched by Peter's team.

Garrou says there are a lot of companies focused on this area. Return Logic joins other companies that tackle returns. Saara is trying to do it in a more eco-friendly way.

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According to the CEO of ReverseLogix, a cloud-based returns platform that raised $20 million last year, spreadsheets and manual processes are no longer enough for returns management.

Increased investment for technical upgrades is flowing into this area. Optimizing returns will have an out-sized impact, from efficient returns and repairs to sustainable goals, labor management, and even new revenue opportunities. I believe a returns management system will become its own solution category.

The US product returns management market is estimated to be worth $10 billion.

The new capital will be used to increase the workforce to 50 by the end of the year, according to the company's CEO. The company is going to lean into its sales model.

The company is working with another platform.

He said that their vision is to be the operating system of returns on any platform. As we open up additional platforms and a broader base, which leads into our growth potential, this is a big step for us this year.

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