We are here at ShopTalk 2025 at the Mandalay Bay in Las Vegas and seeing and hearing all about the latest in retail, e-commerce, and more.
How much are your product returns costing your business—and how much opportunity are you leaving on the table by treating returns as a cost center instead of a competitive advantage?
Today, I’m excited to welcome Katherine Lehman, CMO of ReturnBear, a leader in reverse logistics and sustainable returns solutions. At ReturnBear, she’s helping brands turn returns from a logistical headache into a strategic advantage.
Resources
ReturnBear: https://www.returnbear.com
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Transcript
Greg Kihlstrom:
We are here at ShopTalk 2025 at the Mandalay Bay in Las Vegas and seeing and hearing all about the latest in retail, e-commerce and more. How much are your product returns costing your business and how much opportunity are you leaving on the table by treating returns as a cost center instead of as a competitive advantage? Today, I’m excited to welcome Catherine Lehman, CMO of ReturnBear, a leader in reverse logistics and sustainable return solutions. At ReturnBear, she’s helping brands turn returns from a logistical headache into a strategic advantage. Catherine, welcome to the show.
Katherine Lehman: It’s so great to be here. Thank you for having me.
Greg Kihlstrom: Yeah, looking forward to talking about this with you and always great to do this in person. I do most of the interviews remote, so it’s always nice to be here on site at Shop Talk. Before we dive in, though, why don’t you give us a little background on yourself as well as what you’re working on at ReturnBear?
Katherine Lehman: Yeah, absolutely. So I’ve been in the logistics space about six years now, worked with a couple different companies, all of the map brands, software, but I love logistics. So I’ve decided to stay in logistics and I joined the return bear team back in October as a fractional commitment. And now it’s a full-time gig because I really love the company. We are doing something unique in the reverse logistics space that is really necessary for this moment in time. And it’s going to be a competitive advantage for a lot of these companies. And I don’t even think they realize it yet.
Greg Kihlstrom: Nice, nice. So why don’t we start then, what exactly is reverse logistics?
Katherine Lehman: So reverse logistics is everything that happens when you need to make a return. So it’s from the RMA process all the way through micro forward fulfillment, if you’re going to be doing that, and everything in between where the package goes. Is it going back into sales? Is it getting liquidated? What happens to it? All of that is part of the reverse logistics process. And it’s probably the most complicated part of logistics.
Greg Kihlstrom: Yeah, yeah, I can imagine. And, you know, a lot of companies treat returns as kind of a necessary evil. But you’ve said that they can actually be a strategic advantage. Can you talk a little bit about that? You know, how can reverse logistics benefit both the environment and businesses and sounds like the customer as well?
Katherine Lehman: Yeah, you kind of got to break it apart by threes. First, you got to think of the customer. So a great return experience is going to keep that customer with you. The Internet is full of all of these companies and all of these complaints about people’s return process is not working. And it just severs the relationship with the customer. You want it to be easy. You want it to be fast. You want to get your money back and you want to have a good experience and move on. A lot of companies spend a lot on acquisition, but retention of those customers is huge. So it is about the customers, making it easy for them and making sure that that’s a delightful experience. The second part is for the merchants itself. They can be really, really expensive when done incorrectly, especially in the cross-border space, which is where we like to play. But you have to think of it in terms of how you can consolidate it, how you can make it easier. For us, that means putting things back into inventory right away and doing micro forward filament. So instead of something going back and forth across the ocean several times before it goes back in and gets verified, we can verify it and put it right back into your inventory. Super important for all of our fashion brands that have a seasonality. So if you’re selling a St. Patrick’s Day shirt, nobody wants that shirt, right? You’ve got about six weeks to make that happen.
Greg Kihlstrom: On March 18, I think it goes away, right?
Katherine Lehman: Exactly, exactly. And that’s true of a lot of fashion brands and a lot of the footwear brands that we work with. There’s just that seasonality to it. So the faster you can turn it over, the more profit you’re going to make. And then the last part is about the environment. Like I said, we work in the cross-border space a lot. So we activate in Canada, the US, the UK, and Australia. I can’t imagine being an Australian retailer having someone in the U.S. buy my product, shipping it all the way across the world. Then they decide they want to return it and then it has to go all the way back across the world. So they’re waiting for their refund for, you know, four to six weeks until it gets across on that container ship. And then the just the cost is so huge, right, to both the monetary value of the merchant as well as the Earth, right? That’s a lot of fuel that’s going to be sending stuff back and forth. So we do a lot of that with cross-border consolidation, both at our facility and then when it’s actually crossing the border, so that we’re cutting down on that carbon footprint.
Greg Kihlstrom: Got it, got it. So let’s talk about micro-fulfillment. So it’s a hot topic in retail. How can smaller e-commerce brands leverage micro-fulfillment strategies to compete with some of the larger players?
Katherine Lehman: Specifically on the return side, it is that seasonality, right? So if you’re selling something and it’s hot right now, or you’re getting your first big boom off of whatever advertising campaign you did. I’m thinking of a necklace that was worn by Michelle Obama at like an event or something. overnight that brand became a sensation. And they were just selling, selling, selling like hotcakes. But if you have things being returned, at any given time, 20% of a company’s inventory is tied up in returns. So it’s in transit somewhere being returned by somebody. The faster you can make that process to verify it and get it ready for resale and micro-forward filled to the next person, the more profits you’re going to get. Right. So to nail that part of the process, you’re setting yourself up for not only better inventory management, but also just better service of your customers. They’re not going to have to wait for it to come from halfway across the world. It’s already right there in their geolocation.
Greg Kihlstrom: Well, especially for those smaller retailers. I mean, they have limited Stock in general, right?
Katherine Lehman: Yeah. If you only have 500 units of a pair of shoes and you’re all out of size eights and somebody returns a size eight, you want to be able to turn that over quickly. Like that’s a sale. Yeah. Out of stock. We love to say to see the wait list for out of stock items. But the fact is, if you’re going to a wait list for something, that person might not come back to make that purchase. You have to make it available to them right away.
Greg Kihlstrom: Yeah.
Katherine Lehman: We’re very instant gratification driven.
Greg Kihlstrom: Well, and there’s a lot of choice, right? So yeah, yeah.
Katherine Lehman: If you need it for an event or something like that, maybe I need new shoes for shop talk. I can’t wait around for it to come back in stock. I’m going to go somewhere else.
Greg Kihlstrom: So what are some key elements to a successful micro fulfillment strategy, especially when it comes to handling returns efficiently?
Katherine Lehman: I would say really choosing your locations, right? So if you know your customer base is in the United States and you’re a brand out of the UK, having a good partner like ReturnBear is critical, right? You wanna make sure that your returns are gonna be verified. They are going to be correctly repackaged. So we make sure that we take into account all the specific things that a company might need. So say your branding experience is to wrap it nicely in tissue paper, put a sticker on it and put a little sachet of roses on top. Great, that all happens in our facility. So it’s the same brand experience going out to the customer. They don’t know it’s coming from somewhere else, right? So you can bake all of that into the process and really make it very successful to maintain your brand experience and to cut down on that shipping time. So if you know you’re going to ship a ton of swimsuits, you know, from Australia to the US during our summer, which is not their summer, you know, you can plan ahead for that seasonality and have all those returns pooling in one place. So they’re ready to ship out.
Greg Kihlstrom: Yeah, yeah, that’s great. So return fraud is becoming a bigger issue for retailers, especially as online shopping grows. How can retailers implement fraud prevention strategies without compromising customer experience?
Katherine Lehman: So we do it through our verification process. We’re not using AI, we’re not using anything else right now. We are humanly verifying those products. So when we see them at our return bar locations in Canada, we are verifying it on the spot, the customer is getting an instant refund, and the fraud is eliminated. We eliminate fraud 100% because we have a human looking at that item and making sure it is ready to go back into inventory. So that means you’re not giving me a pair of size seven Sperry shoes, you’re giving me the Nikes that you purchased and I’m taking them back. So that part of the equation is really important to reduce fraud, to have those eyes on the product. And we can do that at our return locations.
Greg Kihlstrom: Yeah, I would imagine that, you know, AI is great for a lot of things, but that seems like a pretty good use for humans, right? Yeah.
Katherine Lehman: Hopefully someday we’ll evolve to that direction. But for right now, that really gives us the ability to knock down fraud to zero.
Greg Kihlstrom: Yeah, yeah. Let’s talk a little bit about returns management and how it’s evolved over the last few years, as well as where do you see it heading in the next three to five years? It feels like forever in the future, but where do you see things going?
Katherine Lehman: Things definitely move fast. I would say that in the past few years, people have gotten used to the Amazon model, right? We’re all trained on the Amazon model now where returns are free. They’re fast. They’re easy. They want the drop-off location to make it part of their daily life. They don’t want it to be hassle-filled. I remember ordering something from Spain when I think like maybe 10, 15 years ago, and I had to return it. And it was a terrible process. And I remember waiting six weeks not knowing where my package was, not knowing where my refund was, not knowing where any of that is. So all of that process erodes the customer experience. And I think that’s kind of the history. So Amazon kind of turned that around and said, no, no, we’re going to make it free. We’re going to make it easy. And now everybody’s struggling to catch up. So Returnware gives that Amazon level experience because we do have drop points in Canada that we use. We call them return points, but they’re across all of it. So we cover 80% of Canada with our drop locations, which is great. So they can have that experience even though they’re a smaller brand. For the future, I think more companies are realizing that they have to deal with this problem before they scale, especially internationally. And the social eye on returns has changed a little bit from documentaries like Buy Now on Netflix. Not sure if you saw it, but it was kind of an eye opener for a lot of people that when you buy stuff, especially in apparel, we do what’s called bracket buying. I say we, I’m talking about like women in general. But a lot of people do it, where they’ll buy six or seven of the same item in different sizes or different colors or different fits, and you return what you don’t want, right? You try on that first pair, those are perfect, great, I’m going to send all the rest of them back. People assumed that those were going back into inventory, and Buy Now showed us that a lot of those could end up in landfills just because they can’t be verified and resold. They just don’t have the process for it or they don’t have the time, right? So I think now that the public is more aware of that problem, the eye has to be on sustainability. It has to be on improving these processes to make them easier and easier so that we can feel like a better consumer. Consumers want that, especially the next generation of shoppers. They are very environmentally conscious and they don’t want to be part of the problem. They want to be part of the solution. So the brands that take a stand on that are the brands that are going to thrive in this next 10 years.
Greg Kihlstrom: Yeah. Yeah. So, I mean, along those lines, then, you know, what do green returns look like in practice, then?
Katherine Lehman: It’s the shortest amount of distance imaginable to ship it forward. So package-free, label-free, just drop it off. That is a great solution because you’re not sending it somewhere, you’re not mailing it in. We do mail-in returns too, because we don’t have coverage everywhere, but anytime you can eliminate the packaging, the labeling, and all that stuff that goes into it, that’s one step. The next step is consolidating everything together and shipping it together versus piece mailing it out, because you’re just sending one truck instead of all of those trucks. And then the secondary console, when you’re sending it back to the country of origin, if it needs to go back to the country it came from, same thing. You’re sending one pallet on the ocean or even in the air, wherever you’re sending it, instead of individually sending packages out one at a time. That is just so expensive for both the environment and for the merchant to do it piecemeal like that. So we eliminated so much of the cost for our merchants, up to 60% of savings on returns.
Greg Kihlstrom: Wow. Wow.
Katherine Lehman: And I mean, it’s a very high number.
Greg Kihlstrom: This is one of those cases where, you know, what’s good for the environment is also good for the business. Right. I mean, I like the win win. So absolutely.
Katherine Lehman: Absolutely. Like I said, those businesses are going to be put on the spot to be more sustainable in the future. And this is just the first steps that we’re seeing now.
Greg Kihlstrom: Yeah.
Katherine Lehman: So be ahead of the curve and you’ll do great.
Greg Kihlstrom: Love it. Love it. Well, one last question before we wrap up here. What do you do to stay agile in your role and how do you find a way to do it consistently?
Katherine Lehman: Ooh, I’ve been in marketing a long time, but I like to call myself a learnaholic. I am the first one to try out new tech, so I was talking about AI three years ago, and everybody’s like, what are you talking about? And then it exploded, everybody’s like, how did you know? How did you know? But I’m always reading, I’m always learning and listening and trying to find new things. This is my fourth Shop Talk, so I learn a lot on the show floors, talking to people, meeting new things. My ears are always open and my eyes are always open, because you never know what’s gonna be the next thing that you need to learn. So, just to keep learning.
