UPS buys “reverse logistics” biz Happy Returns as the send-it-back industry booms
Ordering five pairs of shoes… only keepin’ one. UPS is doubling down on returns. The mega shipper said yesterday that it was buying Happy Returns, a “reverse logistics” company purchased by PayPal in 2021. Happy Returns specializes in label-free, box-free returns (picture: just dropping off jeans at the counter). UPS said that after the deal closes this quarter, the simplified-return service will be available at 12K+ locations.
Happy Returns said it saves merchants as much as 40% on return costs like shipping, restocking, and junking (partly) by batching returns.
Lotsa orders, one return… If thousands of fans return their newly purchased Philadelphia Phillies jerseys via Happy Returns, it can then send ’em all back at once.
“Free returns” ain’t free… America’s send-it-back habit was supercharged by the pandemic online shopping boom: the # of packages returned in 2020 soared 70% on the year. The National Retail Federation said that last year customers sent back about 16.5% of purchases. Now online retailers see 20% of orders returned. US end-of-year holiday returns alone are said to be worth $300B/year. Because returns are so expensive for retailers, companies like Zara and H&M have started charging for online returns (#FeeReturn).
Returns have turned into a business… as retailers look to offer customers convenience while saving $$. Companies like Pollen Returns have stepped up for a piece of the ballooning return pie by promising to take packages directly from customers. Uber recently started letting users in dozens of US cities pay a flat $5 to have drivers take their returns to the post office. Industry insiders say the reverse-logistics market could hit $1.6T in the next decade.