For a brand or retailer selling in today’s marketplace, there are countless technology tools available to help improve the customer experience. In such a crowded marketplace, a strategic partnership between companies can provide both solutions with an edge; loyal customers of one are likely to trust the other. That’s what payments solution Affirm may be hoping for with its latest acquisition of returns platform Returnly.
This acquisition is an expansion of a previous corporate relationship, beginning in 2019 when Affirm made an investment in the returns solution. Once the transaction has closed, which is estimated to take place before June 30, Affirm merchant partners will be able to access the Returnly solution and strengthen their own customer offerings. This is thought to be particularly valuable in an e-commerce-centric environment.
“Over the last few years, alongside the rapid growth of online shopping, consumers’ expectations of accommodations for returns and exchanges have increased significantly,” said Max Levchin, CEO and founder of Affirm. “In 2019, Affirm invested in Returnly because we recognized their technology’s ability to help merchants remove friction from returns, drive loyalty, and retain more customers.”
With Returnly, eligible shoppers are able to receive immediate store credit once a return is initiated; many other returns policies require the item to be received by a warehouse before a refund is initiated. By minimizing this waiting period, retailers can encourage their customers to order new or replacement items without needing to incur a double cost, which in turn can improve the customer experience and foster brand loyalty.
This kind of convenience is in line with Affirms’ own offering of splitting up purchases into four payment installments. This increases purchasing flexibility and allows customers to get their items quickly, before the full sum has been paid – or refunded in the case of a return. In turn, this ensures a faster fulfillment process and a more efficient customer journey.
“We want to be the best partner to our merchants by offering value added services they aren’t able to get anywhere else,” said Michael Linford, CFO at Affirm. “Returnly supports this vision by helping merchants address a key pain point in their customer’s journey — the process of completing a return.”
Returnly currently counts over 1,800 merchant partners and 8 million end-users, while Affirm counts over 6.2 million shoppers. Through this partnership, both companies will expand their prospective audience base and be able to leverage each other’s networks in order to grow further. This is also hoped to be true for the companies’ merchants customers: With more to offer, they should also attract greater sales numbers.
Under the terms of the agreement, Affirm will acquire Returnly for total cash and equity consideration of approximately $300 million. The U.S. returns business in 2020 is estimated to have cost retailers $428 billion in merchandise.