PayPal Acquires Happy Returns eCommerce Return Platform

Happy Returns, a startup that aims to make returning eCommerce goods easier for both shoppers and sellers, has been acquired by PayPal.

Before launching in Santa Monica, California six years ago, Happy Returns Co-founders David Sobie and Mark Geller noticed that returning merchandise purchased online “was wasteful, expensive and cumbersome for everyone involved,” according to a company press release.

The startup launched a platform to facilitate box-free returns with in-person drop-off, which saves people time and saves sellers money while being more environmentally sustainable. The company has more than 2,600 drop-off locations in more than 1,200 metro areas in every U.S. state and in Washington, D.C.

Happy Returns collaborates with hundreds of brand partners, and it said that being part of PayPal will help the startup advance growth and build out its presence. The company said it has always had a “close relationship” with PayPal and respects its “eCommerce leadership.” Happy Returns said it anticipates that the acquisition will help it grow its footprint and reach more people.

Conversely, Happy Returns said that its technology and platform will help PayPal grow “beyond discovery and payments to the post-purchase experience,” according to the release.

PayPal first invested in Happy Returns in 2019, backing the startup with $11 million. Sobie said at the time that online purchases are returned 15 to 40 percent of the time, and that in-store purchases were only brought back 5 to 10 percent.

The escalation of online shopping triggered by the pandemic has brought to light just how cumbersome and wasteful eCommerce returns could be, made worse by restrictions and social distancing. As more and more consumers shifted to buying online, it triggered an escalation in returns. Some bigger retail store brands changed their return policies amid COVID-19 health concerns.