Processing returns is a monumental task for retailers — in fact, the National Retail Federation and Appriss Retail reported that in 2023, the industry processed a staggering $743 billion worth of returned merchandise.
However, in an effort to make the return process more convenient, retailers have implemented various customer-friendly strategies. For instance, Amazon teamed up with Kohl’s and Target now offers a drive-up return option. Startups have also joined the fray, introducing novel technologies aimed at streamlining the delivery and return experience.
One such startup, initially called Returnmates but now rebranded as Sway, has recently received new venture capital for its customer-centered approach to delivery and returns. The Los Angeles-based company secured $19.5 million in Series A funding, with 7GC taking the lead. Other investors include Blackhorn Ventures, Lightshed Ventures, and Rise of the Rest Revolution, bringing the total raised by the company to $25.6 million.
According to company co-founder and CEO Eric Wimer, the decision to rebrand as Sway represents their evolution from simply managing returns to also offering last-mile delivery services. In an email to TechCrunch, Wimer explained, “We have developed solutions that reduce retailers’ costs, lessen the environmental impact, and create a frictionless returns experience for shoppers. With Sway’s doorstep returns program, the customer is met where they are — no more hassles printing labels, repackaging items, or waiting in long lines at the Post Office. Returns can now be processed from the comfort of one’s own home.”
After a disappointing trip to the Post Office in 2020, Wimer, a former Uber employee, joined forces with co-founder Kristian Zak to tackle the challenges of package delivery and returns. Sway’s innovative approach relies on a two-way communication platform and a network of driver-partners who closely monitor the entire process, from package receipt to return.
Customers can take advantage of Sway’s two-way SMS platform and tracking page to receive a 30-minute delivery or pickup window. They can also add specific delivery instructions and include additional packages for pickup.
In addition to next-day and two-day delivery options, Sway also offers a doorstep return and exchange service, effectively reducing the return cycle from a week to just three days on average.
Since its inception, the company reports that businesses using Sway have seen a 66% decrease in lost packages and a 20% increase in repeat purchases compared to traditional carriers. Wimer explains, “A return that goes through the Sway network is more cost-effective than one shipped back individually to the retailer. Not only do we verify the item in our warehouse, preventing fraud and allowing for an instant refund, but we also consolidate multiple returns into one box, cutting shipping costs and eliminating the need for individual repackaging.”
Sway has expanded its operations to 20 cities since August 2021 and has grown its team from five to 100 employees. During the same period, the company has experienced a 14x increase in revenue and a 7x increase in its customer base.
Currently, Sway operates in California, Texas, Washington, Washington D.C., Maryland, Virginia, New York, and Florida. With the new funding, the company aims to continue its technological development, expand its team, and increase its coverage from 20 to 25 cities, says Wimer.
He concludes, “Given our impressive revenue and customer growth over the past few years, this capital is crucial in scaling our infrastructure, technology, and reach to better support our clients, customers, and driver partners.”