Business booms for lost-and-found software maker | nnbw.com
YOUR AD HERE »

Business booms for lost-and-found software maker

JOHN SEELMEYER
jseelmeyer@nnbw.biz

Orders exploded last week for a young Reno company that developed a Web-based system to reunite consumers with items that they’ve left behind at hotels, airports or other public places.

And while no one thinks much about lost-and-found, Chargerback is targeting a sector in which an estimated 46 million items a year are left behind in hotel rooms, a figure that doesn’t cover items lost in arenas, restaurants or rental cars.

In fact, a typical 1,000-room hotel will handle about 800 items a month left behind by guests, says Brian Colodny, the Carson City certified public account who serves as president and chief financial officer of Chargerback.

Colodny and co-founder Michael McLaughlin of Minden — he’s the president of automotive parts distributor Ramac Industries and managing partner of Garage IQ — spent well over a year developing an easy-to-use software.

Here’s how it works:

Chargerback provides its software for free to hotels, and they create a lost-and-found link to Chargerback’s software. The software maintains an inventory of lost items. (Consumers don’t see the inventory, so they can’t go shopping and make a bogus claim.)

A consumer who has lost an item, meanwhile, uses the Chargerback platform to inform the hotel’s staff. If there’s a verified match, the consumer gets a notification about the cost of returning it via U.S. Postal Service priority flat-rate mail. The software handles the mechanics of billing and mailing.

Chargerback gets a small cut from the fee that a consumer pays for return of an item.

That revenue is likely to jump sharply after an international public-relations campaign won the company exposure in big publications such as the New York Times and USA Today.

“We’ve had a number of hotels all across the country sign up in the past week,” says Colodny. “It’s just a matter of getting the word out.”

And not only hotels have been calling.

Ranson Webster, the veteran Reno technology investor who serves as chief executive officer of Chargerback, has taken a few calls from investors looking to get in on the action.

The privately held company, entirely self-funded, isn’t looking for money. In fact, Colodny says it’s sufficiently well-capitalized to meet the demands of rapid growth. Its staff today totals four, but might grow as large as 25 during the next couple of years if there’s need to boost customer-service staff.

Colodny started thinking about lost-and-found in early 2010 when he left a phone charger at Southern California hotel. When he called, the hotel’s staff laughed at him.

A few months later, he joined forces with McLaughlin to begin developing the product that got its name from Colodny’s lost phone charger.

They quickly learned that lost-and-found operations generally are a hassle for hotel operators, but a smooth system of matching owners with lost items helps to build customer loyalty.

Early on, they began talking with executives at the Silver Legacy, and the downtown Reno property helped shape Chargerback over a year of planning and beta testing.

“Lost-and-found is a hot potato that no one wants to deal with,” says Jean-Pierre Patay, hotel director of the 1,710-room property. “Nobody really has a good grip on it.”

An efficient lost-and-found process builds customer loyalty, Patay says, and it also helps Silver Legacy make stronger bids for convention business.

Increasingly, he says, convention planners specifically ask about environmentally friendly practices by hotels. The Chargerback program, which keeps lost items out of landfills, makes a statement about a hotel’s commitment to keeping green.

Along with Silver Legacy, major Reno-area hotels now have signed on with Chargerback, and the company also counts major Las Vegas properties such as Excalibur and New York New York among its partners.

Those hotels have been an abundant source of ideas to improve Chargerback, which has three patents pending to protect its technology.

At the same time, Colodny says the Chargerback founders were spooked about loading up the platform with too many features no matter how attractive they sounded.

“The hard part,” he says, “was keeping it simple.”