Dive Brief:

• Digital payments pioneer PayPal has teamed up with Ulta Beauty to add Happy Returns locations to over 1,300 stores nationwide, according to a company press release. PayPal is also making the Happy Returns return and exchange software free for PayPal merchants.
• With PayPal's Happy Returns portal, merchants can access detailed reports of returns data and reply to customers' return-related questions in real time. The platform also conforms to the shoppers' local language based on their location, the release said.
• The new collaboration with Ulta Beauty brings Happy Returns' locations to more than 5,000, making the service available within a 10-mile radius of 78% of U.S. consumers, per the announcement.

Dive Insight:

PayPal acquired Happy Returns last May for an undisclosed sum. Now, it's integrating Happy Returns services into its merchant checkout system, further solidifying a link that began before the COVID-19 pandemic and the subsequent boom in e-commerce returns.

Previously, PayPal and other investors injected $11 million into Happy Returns in 2019.

Happy Returns has consistently added more partnering retailers to its lineup. In 2019, the company expanded its partnership with Cost Plus World Market after piloting its Return Bars at 11 locations. The company went on to add fashion retailers like Avenue and Dressbarn, and logistics company FedEx as partners in 2020. Last year, it introduced its return service to more than 1,000 Staples locations. 

Rolling out throughout this year, Happy Returns will now add its service in more than 1,300 Ulta Beauty stores across the country. Ulta Beauty Chief Operating Officer Kecia Steelman noted in a statement that a pilot with Happy Returns brought higher traffic into stores and drove in-store engagement with customers.

"Though consumers have increased their frequency of online shopping, returns are commonly an 'in person' experience and are costly and challenging for merchants," Vice President of Happy Returns by PayPal David Sobie said in a statement. "Our partnership with Ulta Beauty widens our in-person drop-off network and gives online shoppers more options to complete returns — Return Bars bring new customers into stores and give merchants a more cost-effective and practical way to manage their reverse logistics."  

Now that the pandemic has sparked a rise in e-commerce spending and returns, PayPal isn't the only company looking to capitalize on the returns boom. Last April, Affirm, a buy now, pay later installment financing service, bought Returnly for roughly $300 million.

Following the 2021 holiday season, the National Retail Federation and Appriss Retail estimated that shoppers returned more than $761 billion worth of goods last year.