Routing returns to other online shoppers

An AI solution helps e-commerce businesses cut costs and carbon emissions

Spotted: The surge in online shopping, fuelled by the convenience of free returns, has inadvertently contributed to a significant emissions problem – one study estimates that e-commerce returns alone generate up to 24 million metric tonnes of CO2 a year. Recognising this, Canadian startup Frate was committed to finding a solution.

Frate’s innovative white-label platform empowers e-commerce businesses to offer the option to return without sacrificing sustainability. Instead of traditional returns, Frate facilitates direct exchanges between customers, reducing the need for products to be shipped back and forth from the company warehouse.

When a customer indicates a desire to return, the platform encourages them to hold on to the product by offering discounts. At the same time, Frate also relists the product on the retailer’s store at a discounted price. If another customer then purchases that product within a given timeframe, the retailer can ship from one customer to another.

By leveraging AI to assess product condition through images, Frate ensures that only perfect items are listed and exchanged, while products in worse condition are resold as used items, diverted to a liquidation centre, or sent for recycling. This advanced approach minimises environmental impact by limiting unnecessary repackaging and expensive journeys back to the warehouse. And, it significantly enhances customer satisfaction by providing reassurance about product quality.

Last month, the startup raised CA$3.6 million in a seed funding round led by Matchstick Ventures. Frate already serves popular brands like Canada Pooch, Arezzo, and Schutz, but with the latest financing, the company hopes to further develop the platform and expand its operations.

Written By: Joshua Solomon