Dive Brief:

• Returnly last week launched Instant Gift Exchange for Shopify Plus. The program allows gift recipients to select an alternative gift before returning their original gift, according to a company press release. 

• Returnly data shows the rate of repurchase increased three times the industry average when shoppers could use their return credit to buy again before shipping their returns back. "This levels the field for digital native brands, who are traditionally at a disadvantage with big retailers that can re-engage customers during the holidays in physical locations," the release noted.

• Direct-to-consumer brands offering this option include Outdoor Voices, Untuckit, Goorin Bros., Faherty Brand and Koio.

Dive Insight:

An enhanced integration with Returnly anticipates a major challenge for many retailers, especially direct-to-consumer brands. The holiday season is a notorious one for returns: business-to-business marketplace B-Stock reported last year that 11% to 13% of holiday purchases are returned, with women's apparel leading the list of most-returned merchandise from Q4 sales. Twenty percent of the year's returns take place at the holidays, the firm claims. Consumers have come to expect that not every gift will be a hit: 77% expect to return a portion of their gifts this holiday season, a September survey from Oracle Retail found.

Returnly and Shopify have been technology partners since 2017.  This new offering serves Shopify Plus users, a program that was announced in June at the same time Shopify revealed a new fulfillment network that uses machine-learning technology to optimize delivery. Shopify has strengthened its offerings recently amid competition from other platforms like Square, Clover and Stripe. According to analysts, Shopify's combined reach is poised to make the company the third largest e-commerce site behind Amazon and eBay. 

Returnly announced an $8 million Series A funding round in January. In May, the company launched Green Returns, allowing its retailers to offer refunds for items that can't be resold due to health risks, like undergarments and cosmetics.