PayPal announced that it is expanding services by allowing retailers with PayPal Checkout to use the Happy Returns and Exchange portal at no additional cost, to better improve the shopper experience when handling returned goods. Included in the added services is a new return bar partnership with Ulta Beauty offering shoppers in-person returns at over 1,300 locations nationwide. In September of last year, PayPal’s Happy Returns added 1,000 locations upon partnering with Staples and will now have over 5,000 locations. With this expansion, 78% of Americans will live within a 10-mile radius of a Return Bar, making the return process convenient and efficient for consumers.
Seamless returns help retain revenues
Happy Returns offers participating retailers, including the recently announced retailers that currently use PayPal Checkout, the ability to use proprietary software which coordinates returns and exchanges for customers either for online or in-location processing at one of the Return Bars. Happy Returns helps retailers streamline the returns process and provides customers with a better shopping experience. David Sobie, vice president of Happy Returns, PayPal, said, “By offering the Happy Returns software free of charge for PayPal Checkout retailers, we are delivering a post-purchase solution for merchants that helps them retain revenue and gives them a competitive edge in today’s market.” The Happy Returns software automates returns and exchanges and delivers a more user-friendly customer flow. “As return volumes continue to increase, this is a crucial time for merchants to implement efficient and cost-effective solutions that better equip them to manage the growing role returns play in retail,” said Sobie.
The Return Bar process enables customers to drop off returns without packaging or printing out paperwork and provides this service in under 60 seconds. A QR code is given to the customer and they take the item and code to the return center for an immediate return. The returns are then aggregated into consolidated shipments and sent to a central processing center which lowers return costs and provides a more sustainable model.
Return Bars drive store traffic and customer engagement
Customers can decide to exchange products or receive a refund. For retailers such as Ulta Beauty, Happy Returns allows customers to select return locations based on their preferences and convenience. Sobie co-founded Happy Returns in 2015 which was recently acquired by PayPal in 2021, and he believes that the company helps to significantly reduce a retailer's cost incurred by product returns. Sobie said, “Happy Returns provides a more sustainable and less costly way for retailers to handle returns and on average retailers that use the service are experiencing a cost savings of over 20% for returns processing.”
From a retailer's perspective, making returns easier and more convenient for customers can help build deeper loyalty. Kecia Steelman, chief operating officer of Ulta Beauty stated, “We are thrilled to welcome Happy Returns to the Ulta Beauty family to deliver our guests greater convenience.” Based on a pilot of the Happy Returns process, Ulta Beauty experienced an increase in-store traffic and high engagement with the customers that used Return Bars.
Returns are a challenge for retailers as online sales grow
Returns continue to be an ongoing issue for the retail industry and the National Retail Federation showed that returns have increased from 10.6% of total retail sales in 2020 to 16.6% in 2021, totaling $761 billion in products being returned last year. As online shopping continues to grow, returns have grown in tandem. Online sales have a higher return rate than in-store sales with online returns representing 20.8% of total online sales.
Online digital natives win big with Happy Returns
Many digital native brands such as REVOLVE, Gymshark, American Giant, Rothy’s, and Reese Witherspoon’s clothing line Draper James, use Happy Returns and Exchange to handle customer returns. Since these brands do not have physical stores, the Return Bars become an important return or exchange solution for customers. Sobie discussed how online customers prefer to use Happy Returns in-location Return Bars at a rate of 70% as opposed to mailing back unwanted goods.
International expansion on the horizon
Happy Returns customers in Europe and Canada can now set up the returns process in a localized fashion with eight languages available for international businesses. According to the company, the appropriate language is displayed automatically based on the shopper’s location, with the translation of all screen instructions including a custom copy provided by the merchant. The returns portal also includes a robust dashboard that enables the merchant to run detailed reports of returns data and respond to returns-related customer inquiries in real-time. “Happy Returns has made it possible for us to offer seamless exchanges to our customers across the globe, helping retain revenue we would have otherwise lost,” said Niran Chana, president international of Gymshark.
The Happy Returns solution for international business handles only online returns at this time but Sobie discussed that having Return Bars would be a logical progression for the company. For international customers, the company focuses on better logistics for coordinating returns through its carriers and facilities. Sobie said, “We have been focused on one market, the U.S., but with our PayPal acquisition we have the ability to more quickly scale the business overseas.” The company has reached a pivotal time in its history. “We are able to dream bigger,” gleamed Sobie.
The PayPal platform is empowering more than 425 million consumers and merchants in more than 200 global markets. PayPal’s Happy Returns works with over 300 retailers and brands.
