Processing returns is a big job for retailers. Total returns for the industry reached $743 billion in merchandise in 2023, according to the National Retail Federation and Appriss Retail.
Retailers have tried to make it easier for customers to return items. For example, Amazon partnered with Kohl’s and Target has started accepting returns from your car. Startups have also entered with new technologies to manage the delivery and return experience.
Returnmates, now rebranded as Power, is the latest to attract new venture capital for its customer-focused approach to delivery and returns. The Los Angeles-based company raised $19.5 million in Series A led by 7GC. Additional participants include Blackhorn Ventures, Lightshed Ventures and Rise of the Rest Revolution. To date, the company has raised $25.6 million.
The company rebranded itself as Sway as a way to show its evolution beyond returns to last-mile delivery capabilities, company co-founder and CEO Eric Wimer told TechCrunch via email.
“We’ve built solutions to lower costs for retailers, reduce environmental impact and remove friction for shoppers,” said Wimer. “For the shopper, Sway’s home returns program meets the customer where they are. No more printing labels, repackaging or waiting in line at the Post Office — you can process your return from the comfort of your own home.”
Wimer, an early employee at Uber, teamed up with co-founder Kristian Zak to take over the package delivery and return experience after an ill-fated trip to the Post Office in 2020. Sway’s approach relies on a two-way communication platform and network of driver-partners to tracking purchases from pickup at the door to any returns.
Buyers use the two-way SMS platform and tracking page to get a 30-minute delivery/pickup window. They can add access instructions and add packages to their receipt.
The company offers retailers next-day and two-day delivery services, as well as a home return and exchange product that cuts the return cycle from a week to less than three days on average.
Sway co-founders Kristian Zak and Eric Wimer. Image Credits: Power
Since their inception, brands using Sway have seen a 66% reduction in lost package rates and a 20% increase in repeat purchases compared to legacy providers, according to the company.
“A return that goes through the Sway network is cheaper than one sent individually to the retailer,” Wimer said. “We verify the item in our warehouse before it is sent back, thus preventing fraud and allowing us to trigger an immediate refund. We also consolidate multiple returns into one box, reducing shipping costs per unit and removing the need for individual repackaging.”
As of August 2021, Sway has expanded to 20 cities and grown its team from five to 100. In the same period, it has grown revenue 14 times and grown its customer base 7 times.
Sway currently operates in California, Texas, Washington, DC, Maryland, Virginia, New York and Florida. The new funding will allow the company to continue technology development, grow its team and expand coverage from 20 to 25 cities, Wimer said.
“Given our revenue and customer growth over the past two years, the capital has been critical to expanding our infrastructure, technology and footprint to better support our brands, buyers and partners,” said Wimer .
