UPS announces that it plans to acquire Happy Returns

In advance of its third quarter earnings call this morning, Atlanta-based global freight transportation and logistics services provider UPS said late yesterday it has entered into an agreement to acquire Los Angeles-based Happy Returns, a software and reverse logistics services provider, from PayPal.

A purchase price for the transaction was not disclosed. UPS officials said it is subject to customary conditions and regulatory approvals.

Established in 2015, Happy Returns enables frictionless, no-box, no-label returns for merchants and consumers. UPS said the company’s portfolio is comprised what it described as a full stack of returns solutions, powered by software and fully scaled reverse logistics operations that facilitate frictionless returns.

In terms of how its services are used, UPS said through a few simple steps, users can access a returns portal, make a box-free return at the most convenient location and have their item shipped, sorted and returned to the merchant. Happy Returns has more than 800 merchant customers, and a strong track record of providing hassle-free, no-box returns, reducing the cost of e-commerce for all players and creating a more efficient, sustainable supply chain, according to UPS.

“Joining the UPS team is a win for both our employees and our customers,” said Happy Returns CEO and co-founder David Sobie, who will continue to lead the business for UPS after the deal closes. “In recent years, the growth of Happy Returns has accelerated, and we’ve built an enterprise-grade solution. This new chapter is a natural next step for Happy Returns and allows us to harness the power of the UPS network to transform the returns industry.”

UPS CEO Carol Tomé said on the company’s third quarter earnings call earlier today that with the explosion of e-commerce demand, the company’s returns business has been a key area of growth over the last several years. What UPS has seen over this time, she said, is an increasing desire on the part of both its customers and its recipients for a frictionless and simple end-to-end returns experience.

“We've been building out this experience, but to help us get there faster we just entered into an agreement to acquire Happy Returns,” she said. “By combining Happy Returns easy digital experience and established drop off points, with UPS’s small package network and footprint 5,200 UPS store locations, box freight label free returns will soon be available at more than 12,000 convenient locations in the U.S. But our plans for returns don't stop at convenience. For our enterprise retail customers, we plan to provide a consolidated return solution that will lower their costs and improve their experience. And for UPS. Happy returns expands our returns portfolio with an innovative solution that will generate profitable b2b volume and helps drive pickup and delivery density.”

Ben Gordon, founder and managing partner of Palm Beach, Florida-based Cambridge Capital, and managing partner of Ben Gordon Strategic Advisors (BGSA), wrote on X that this deal makes inherent sense.

“Happy Returns gives consumers the ability to return unwanted purchases, typically at retail locations,” noted Gordon. “UPS has its own network of locations, dating back to earlier acquisition of Mailboxes, Etc. Reverse logistics continues to be a pain point for logistics companies, retailers, and consumer brands. Happy Returns is one of several solutions for them.”

And Pavan Mahtani, General Manager of Returns at Veho, a company revolutionizing package delivery and returns for the modern economy, noted that  UPS' acquisition of Happy Returns is a huge vote of confidence for investing in frictionless returns experiences for consumers.

“Easy, no-box, no-label returns are here to stay, but it doesn't stop there; just like with deliveries, we believe this experience needs to extend all the way to your doorstep too,” said Mahtani. “A recent consumer shopping survey from Veho found that 78% of customers would shop with a retailer more often than others if they offered doorstep pickup for returns, indicating that making returns easier for your customers can lead to better retainment. More than ever, it's clear that reverse logistics is playing catch up with forward logistics, and pushing the frontier of seamless shopper experiences is going to be the north star for the evolution of this industry. Retailers need to continue to rethink their returns policies and processes as a core driver of shopper experience and loyalty, and work with the right partners that can enable this for them. The UPS and Happy Returns deal makes it clear that combining digitally-native technology with a sophisticated logistics network is critical for scaling innovation in this space.”