ReturnGO Now Powers Product Returns for Amazon’s Multi-Channel Fulfillment with Expanded Funding to $5 Million

The Problem of Returns

Returns are a regular part of shopping, but as more people shop online, retailers are facing increasing instances of customers buying several clothing sizes of the same item with the intent to return what doesn’t fit. This has created chaos in the returns process.

As a result, retailers not only lose out on sales but also pay to get the item back into its inventory. The problem is so big that returns accounted for more than $816.7 billion in lost sales for U.S. retailers in 2022, according to the National Retail Federation.

A Solution in Sight

With a big problem like this, there’s no shortage of startups trying to solve it. However, it’s not every day that one’s tech approach gets the attention of delivery powerhouse Amazon. ReturnGO has announced today that it and Amazon Multi-Channel Fulfillment have entered into an agreement whereby ReturnGO will provide its return and exchange process for those 300,000 merchants on Amazon’s e-commerce third-party logistics platform.

"We already have merchants in beta and are working with Amazon to educate them on this solution," Aviad Raz, co-founder and CEO of ReturnGO, told TechCrunch. "Now that we are in a recession, it’s a big aspect of saving costs and retaining revenue. We still see growth and returns not going anywhere. Big brands are starting to charge for returns, but that is not so significant yet that we see friction for customers when they want to return items."

ReturnGO: A Revolutionary Approach

Raz, Assi Abramovitz, and Eyal Rosenthal founded ReturnGO in 2020 and currently employ 45 people across Israel, the New York area, and the Philippines. As Raz explained it, ReturnGO not only provides return options but a "post-purchase operating system" that aims to reduce the reverse logistics costs for online retailers while also making the whole process more sustainable.

Raz boasts that ReturnGO’s differentiator is that the automated return and exchange process can be used with any e-commerce tech stack and gives customers more return options. That includes an easier product exchange program to reduce the need for retailers to issue full refunds.

Software-as-a-Service Solution

Its software-as-a-service solution is already being used by more than 2,700 Shopify merchants to process over 283,000 returns each month. This makes the timing quite interesting for ReturnGO. Shopify sold its logistics business to Flexport in May and then partnered with Amazon in August to enable customers to purchase on Shopify and have products delivered through Amazon’s fulfillment network.

"Most of these merchants are in the U.S., and now they can use ReturnGo to do their third-party logistics," Raz said.

Growth Capital

Currently, the company is experiencing about $1.8 million annual recurring revenue, or 2.5x in growth from last year, according to Raz. This new deal also comes as the company secured an additional $4.8 million in growth capital, led by Trestle Partners. ReturnGO raised $6.5 million in seed funding in November.

The Future of Returns

ReturnGO’s innovative approach to returns has the potential to revolutionize the way online retailers handle returns and exchanges. With its automated return and exchange process, customers will have more flexibility and convenience when returning or exchanging items.

Moreover, ReturnGO’s focus on sustainability is a step in the right direction for an industry that has long been criticized for its environmental impact. By reducing the need for returns and exchanges, ReturnGO can help retailers save costs while also doing their part for the environment.

As Raz said, "We’re not just solving a business problem; we’re making a positive impact on the planet."

Conclusion

The returns process is a chaotic and costly one for online retailers. However, with innovative solutions like ReturnGO, there’s hope for a more sustainable and efficient future. By providing an automated return and exchange process that can be used with any e-commerce tech stack, ReturnGO has the potential to revolutionize the way online retailers handle returns and exchanges.

As the retail industry continues to evolve, it will be interesting to see how companies like ReturnGO continue to innovate and shape the future of returns.