Returns Challenge Retailers’ Profit From Now To January 31

After all the shouting, pushing and crowding Christmas eve, is finally here and gifts are under the Christmas tree for everyone. It is sad that not everyone is happy with the gift. Some of the gifts were second choice by the donor – what should the recipient do?

First step is to thank the giver, fib by saying you love it.

Second step is to find the hours the store is open and return the gift as quickly as possible. Exchange it for a color you like – if the color is in stock. Or else get something, anything that fits and pleases you.

Stores are challenged by the overwhelming amount of merchandise that is returned after Christmas. The merchandise has to be checked, if saleable it has to get back to the selling floor as quickly as possible. Tobin Moore, CEO and co-founder of Optoro, said that $120 billion of merchandise is expected to be returned after the current selling season. Aside from the fact that much merchandise will be mishandled by store associates, the volume is overwhelming. Some of the merchandise will be discarded, with the stores taking the markdown and it ends in landfill somewhere west of the Hudson River.

Chain stores like Target TGT , American Eagle AEO , Best Buy BBY and Ikea are using Optoro’s return technology which is taught to associates in stores and warehouses. The merchandise is received by a sales clerk who forwards it to a collection point and eventually it ends a central location where it is sorted, examined and forwarded for disposition.

Optoro return technology uses data science and real-time decision-making automation. From an easy on-line customer return portal to warehouse processing and resale, it offers a powerful solution to improve an effective outcome and offer a strategic and profitable advantage to the retailer. Now Zebra Technologies ZBRA , an innovator at the edge of the enterprise, has made a strategic investment of $25 million in the Optoro operation to gain a performance edge. Circular solutions focused investors Volta Circle, E Bay and UPS have participated in the strategic funding.

The idea of having a more profitable post-holiday selling season is important. Optoro’s interface with store associates makes this possible since they will restock a lot oi the merchandise. Together, Zebra and Optoro will bring best-in-class hardware and software to offer reverse logistic solution that optimizes retail return processes.

POSTSCRIPT: Nordstrom’s JWN quick return policy, which was implemented in 2018, initiated a process of more friendly merchandise return for customers. Optoro’s new processing of returned merchandise is a welcome step in keeping some of the merchandise safe and resaleable. It will benefit the bottom line of stores in the post-holiday season and enable customers to find more desirable merchandise back on the store shelves.