Optoro handles returns for companies in the interest of reducing waste. The process of collecting, assessing, and re-shelving returned goods is often so costly for companies that items are instead thrown out or sold to stores that liquidate the products. Optoro collects these returned products, and then its employees repackage and repair the products to either be sent back to retailers, or—for products the company no longer wants—to be resold to wholesalers or discount websites. According to Moore, Optoro now works with 20 large retailers and handles millions of dollars worth of products a year.

Optoro is one of a handful of companies that try to reduce the cost and complexity of returns, with startups and giant shipping companies alike getting into the market. The main challenge for these companies is helping retailers fix what they see as a broken system, with bad data, overly complex logistics, a messy network of resellers, and fear that frustrated customers won’t send products back due to bad return experiences in the past.

HappyReturns, a startup run by two former executives of HauteLook and Nordstrom Rack, hopes to address the concerns that many consumers have when it comes to returning goods. David Sobie and Mark Geller found that there’s a growing share of consumers who would rather return items in person, either due to worries that an item might get lost in the mail, the hassle of packaging things up and bringing them to the right place, and the desire to get money back immediately. As such, Sobie and Geller are setting up physical locations for customers to return goods to the retailers they work with (they charge stores a per-item fee). This allows the HappyReturns to both ease the hassle of returning lots of items from several different stores and to serve as a reseller for items retailers don’t want back.“The idea for our business was whether we can create a buy-online, return-in-store experience for retailers who don't have stores, and in doing so create value for all parties in the transaction,” says Sobie.

According to Vicky Brock, the CEO of Clear Returns, a U.K.-based company specializing in returns technology, many retailers are only now starting to think about optimizing returns in the logistical sense. Her company, though, is focused on using artificial intelligence to predict and prevent returns in the first place. “The causes of returns are a complex interplay of product, customer, and marketing, and it needs big data and a sharp analytical focus for retailers to understand and act on the information that will allow them to reduce the costly cycle of returns,” explains Brock over email. “In the early land grab for online market share, retailers went for sales at any cost—free delivery, free returns, and techniques like sales conversion and cart optimization. Sales have grown, as have supporting technologies, but shoppers have been re-educated … and returns are growing faster than sales.”