ActiveEdge
Athletic Apparel • $15M ARR
How a PE-backed brand avoided a $2.1M valuation adjustment by identifying $183K in hidden policy drift before acquisition.
$183K
Annual impact
8mo
Undetected drift
$2.1M
Valuation saved
30d
Time to fix
The Problem
ActiveEdge was a PE-backed athletic apparel brand preparing for acquisition. Due diligence required a CX quality audit to validate their operations.
Their internal QA team reported “excellent” performance across all metrics. But the buyer's diligence firm flagged potential margin issues they couldn't explain. They needed independent third-party validation.
92% (up)
Normal (misleading)
What Merro Found
“Fit issues” were being resolved with full refunds + keep the item, instead of the policy-mandated exchange-only resolution.
The pattern began 8 months prior when the lead agent started doing this to boost CSAT scores. The rest of the team followed suit. No one flagged it because CSAT was up and return volume looked normal—items weren't being returned, so the return rate stayed low.
The Hidden Cost
The Fix
Immediate Policy Enforcement
Reset all agents on fit issue resolution: exchange-only unless item is defective.
Refund Reason Tracking
Implemented mandatory reason codes with manager oversight for “keep item” exceptions.
Due Diligence Documentation
Provided buyer with Merro audit report showing identified issue + implemented fix.
Results
$2.1M
Valuation adjustment avoided
30 days
From audit to complete fix
“Our investors asked for CX quality metrics before our Series A. Merro's report gave us exactly what we needed—verified data, not opinions.”
Ryan Lewis
Co-Founder & COO
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