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PayPal Expands Post-purchase Offerings With Happy Returns Acquisition

Despite many parts of the online shopping experience becoming increasingly easy, the returns process can be wasteful, expensive and arduous — for both the consumer and the retailer.

Launched six years ago to tackle online returns head-on, Happy Returns has made it its mission to make the process “beautiful for shoppers, retailers and the planet,” using technology to offer in-person return drop-offs as a solution and boasting a model that reduces the amount of greenhouse gas emissions by 0.12 pounds per item returned. Today, the company’s network includes hundreds of brand partners using its returns software and more than 2,600 locations in 1,200-plus unique metro areas in every state in the continental U.S.

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Now, by joining PayPal, Happy Returns will bring its technology and platform to even more consumers and retailers, expanding upon the company’s post-purchase experience. With PayPal’s support, David Sobie, chief executive officer of Happy Returns, said there will be “additional focus on improving [the Happy Returns] platform and expanding its footprint, all with the goal of providing more customers with the most seamless, cost-effective and environmentally friendly way to make and process returns.”

Here, Sobie talks to WWD about the pandemic’s impact on the returns process, alleviating the environmental effects of returns and joining forces with PayPal.

WWD: What impact has the pandemic had on the returns process for consumers?

David Sobie: The pandemic had three main impacts on returns. First, along with the increase in online shopping, came a steep rise in returns. And at the same time, shipping delays and cost increases made returning by mail less attractive than ever. Many shoppers were working from home, without access to printers. As such, printing return shipping labels was an arduous task, and shoppers were hesitant to send items back, knowing shipping delays could extend timelines for refunds from weeks to months.

The additional challenge for any in-person experience during the pandemic was the unknown impact of health risks being inside, interacting with store associates and passing a product from one person to another.

WWD: From your perspective, has the need for an evolved returns process been amplified due to the pandemic?

D.S.: Yes, the need for a more evolved returns process has greatly amplified due to circumstances surrounding the pandemic. This demand spurred the development of our touch-free returns process. And with more people doing their shopping online comes a greater volume of returns, so the need for a seamless returns process has become more important than ever.

Naturally, shoppers have turned to friction-free return experiences, like Happy Returns, which allows box-free return drop-offs for an immediate refund. Happy Returns redesigned its service in June 2020 to be 100 percent contact-free, relying on QR codes to speed return transactions and eliminating common handling of returns, with shoppers bagging items themselves at drop-off. The changes were wildly popular among shoppers and led to an increase in the adoption of box-free in-person return drop-off.

WWD: How does this partnership between PayPal and Happy Returns provide consumers with a more seamless overall experience?

D.S.: PayPal’s expertise is removing friction in payments and Happy Returns expertise is removing friction in returns. You can imagine a lot of possibilities from bringing those two capabilities together.

WWD: Can you speak to how Happy Returns helps to alleviate some of the environmental impacts of returns in retail?

D.S.: Happy Returns helps to alleviate some of the environmental impacts of retail by operating completely cardboard-free and by accepting box-free returns through a nationwide network of Return Bar locations where online shoppers who purchase goods from Happy Returns’ growing list of retail partners can return products in-person.

[Specifically, the process works with] Happy Returns aggregating returned items across participating retailers then bulk shipping them in reusable packaging to regional return hubs for sorting, processing and routing to the most efficient destinations. The packaging shipped to the retailer’s distribution centers is then collected and reused at Return Bar locations.

The Happy Returns model reduces the amount of greenhouse gas , or GHG, emissions by 0.12 pounds per item returned. For example, a retailer with 1 million annual returns would reduce its environmental footprint by 120,000 pounds of greenhouse gas emissions annually.

As part of PayPal, we plan to scale Happy Returns to more of PayPal’s merchants, which will expand our positive environmental impact.


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