Dive Brief:

  • UPS plans to acquire Happy Returns from PayPal, bolstering its label-free returns, the shipping company announced Wednesday. Financial terms of the deal weren’t disclosed.
  • U.S.-based Happy Returns’ software and operations will help UPS offer customers a full stack of software and technology that facilitate frictionless returns, according to a press release. UPS expects the service will soon be available at more than 12,000 locations in the U.S.
  • Happy Returns CEO and co-founder David Sobie will continue to lead the business for UPS if the deal is cleared by regulators. The companies expect it will close sometime in the fourth quarter of this year.

Dive Insight:

Together, UPS and Happy Returns will help provide “easy digital experience and established drop-off points with UPS’s small package network and footprint of close to 5,200 The UPS Store locations,” UPS CEO Carol Tomé said in a press release.

Using its returns portal, Happy Returns offers box-free returns that are shipped and sorted before being sent back to its more than 800 merchant customers.

The sale of the Happy Returns business by PayPal comes just months after PayPal hired a new CEO, Alex Chriss, who succeeded long-time leader Dan Schulman. It’s a reversal for PayPal after purchasing Happy Returns for an undisclosed sum just two years ago in May 2021.

San Jose, California-based PayPal hasn’t said anything about a new strategic direction under Chriss, but it’s been seeking to jump-start growth in recent years. In another striking piece of PayPal news this week, mega-processor Fiserv said that it has become PayPal’s “core U.S. partner for payment services.”

For UPS, it’s a pivotal time for preparing to handle millions of returns during and after the 2023 holiday shopping season. Happy Returns detailed how it could expand and accelerate its returns business with UPS in a company blog post on Wednesday.

UPS’ capacity and its business operations made it an attractive acquirer for Happy Returns. While UPS handles millions of packages every day, Happy Returns handles the same amount in one month. The delivery giant has also advanced its box-free, in-person drop off to a third-party network with leading brands and has been able to leverage automation with its automated package sorting facility in Louisville, Kentucky.

“We are eager to compare notes and innovate together to make the shopper experience better, reduce return costs for merchants and lower the carbon footprint of return shipping,” Happy Returns said in the blog post.


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