Made in Canada: ReturnBear Simplifies Online Returns Amid Trade Challenges

A Toronto startup, ReturnBear, is addressing the growing challenges of online returns, which significantly impact retailers and the environment. In 2022, online returns led to an estimated U.S. $890 billion in costs and contributed around 24 million metric tonnes of greenhouse gas emissions. Additionally, returns fraud and wasted products exacerbate these issues, with merchants disposing of over 4.3 billion kilograms of goods.

ReturnBear, led by CEO Sylvia Ng since 2021, aims to streamline the returns process by reducing costs, environmental harm, and enhancing customer satisfaction. The surge in return rates, influenced by behaviors like "bracket buying" and "wardrobing," which are prevalent among younger consumers, has reached alarming levels, with some merchants facing return rates as high as 50%. Aiming to mitigate these factors, ReturnBear focuses on three core areas: enhancing the consumer experience, lowering costs for retailers, and minimizing the ecological footprint of returns.

The company operates local logistics networks across Canada, the U.S., the U.K., and Australia, facilitating the collection and refunding of returned items. Instead of returning products to distant warehouses, they store them locally until another customer purchases them. This system reduces costs by 30-70% and cuts emissions by 40-90%. Consumers benefit from quicker refunds, as items do not need to be shipped back abroad.

The fluctuating tariff landscape complicates the returns process, making it more expensive and challenging for retailers to manage their supply chains. With tariff rates increasing on various goods, there’s heightened pressure on merchants to efficiently recover returned inventory while maintaining profitability. In response to these challenges, ReturnBear adapts by emphasizing flexibility, patience, and strategic planning.

Return fraud, which has ballooned to roughly U.S. $100 billion in North America, further complicates online returns. Many fraudulent activities exploit discrepancies in retailer systems between online and physical sales. ReturnBear counters these issues by providing instant refunds at return points in partnerships with locations like Staples and Cadillac Fairview malls. Customers do not need packaging or shipping labels, and returns are verified, reducing fraud to near 100%. Common deceitful return practices include returning empty bags or deceptive items like bricks.

ReturnBear’s environmental efforts focus on local operations. For instance, when a merchant utilizes drop shipping from China, returned items are redirected to local customers, drastically reducing transportation distances from an average of 10,500 kilometers to merely 40 kilometers. This local approach is projected to save the equivalent emissions of planting 50,000 trees over twenty years, based on their return volume.

Despite current market challenges, ReturnBear sees ample growth opportunities. They have expanded into major English-speaking markets and are exploring potential entry into the European Union.

As online shopping evolves, consumers increasingly prioritize convenience and eco-friendliness in returns policies. Ng reflects on her own preferences as a busy mom, considering factors like distance, hours of operation, and environmental impact. She encourages both brands and consumers to rethink their approach to returns, emphasizing the need to balance convenience with ecological responsibility.