PayPal Offloads Happy Returns to UPS

UPS has acquired Happy Returns from PayPal.

UPS has agreed to acquire reverse-logistics solution Happy Returns from PayPal for an undisclosed amount. The deal is expected to close in the fourth quarter of this year.

Happy Returns offers box-free, label-free returns for more than 800 merchant partners at over 10,000 locations across the U.S. including Petco, Hibbett, Ulta Beauty and Staples. The company was acquired by PayPal a little over two years ago as part of PayPal’s ambition to expand beyond payments and become a “digital commerce enablement engine.” However, since the ecommerce boom days of the pandemic, PayPal’s goals seem to have shifted. As competition in the digital payments sector has increases, PayPal’s stock is trading at near its lowest levels since it was spun off from Ebay in 2015.

As PayPal refocuses on its core business, the acquisition of Happy Returns gives UPS a stronghold in a growing segment of its own core business, logistics. Returns, also referred to as reverse logistics, have been steadily growing in tandem with the growth of ecommerce. The National Retail Federation estimates that 16.5% of retail purchases (both online and in-store) were returned last year. Online returns in particular are an expensive proposition for retailers, and Happy Returns promises to make the process easier and more cost-effective both for the retailers that use its service and their customers.

“We know that returns have long frustrated shoppers and retailers looking for quick and easy solutions,” said Carol Tomé CEO of UPS in a statement. “By combining Happy Returns’ easy digital experience and established drop-off points with UPS’s small-package network and footprint of close to 5,200 UPS Store locations, box-free, label-free returns will soon be available at more than 12,000 convenient locations in the U.S.”

David Sobie, CEO and Co-founder of Happy Returns, who will continue to lead the business after the deal closes, said the acquisition was a “a natural next step for Happy Returns” that will allow the company to “harness the power of the UPS network to transform the returns industry.”

“This is a real estate move for UPS,” said Sam Atkinson, CEO and Co-Founder of ecommerce platform Swap. “They’ve now tripled their logistics network, expanding from their 5,000+ brick-and-mortar stores paired with the 10,000 Happy Returns [locations] in the U.S. alone. It turns UPS into the most consumer-friendly logistics provider overnight with a dominant foothold on SMB [small and midsize businesses] and ecommerce business.”