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UPS moves further into “reverse logistics” with purchase of Happy Returns - with Cathy Roberson of RLA

By Stephanie Hughes, Marketplace

October 31, 2023

Listen to the segment on Marketplace here:  https://www.marketplace.org/2023/10/30/ups-moves-further-into-reverse-logistics-with-purchase-of-happy-returns/

Logistics company UPS noted in its earnings call last week that its returns business has grown 25% since 2020. It also announced that it’s acquiring the software and reverse logistics company Happy Returns from PayPal for an undisclosed sum. 

The way Happy Returns works is you bring the item you want to return to one of their drop-off locations, show them a QR code and they’ll take it. 

“You don’t have to worry about boxing it back up, putting a label on it. You kind of give them your bathing suit and go, ‘Here,’” said Cathy Roberson, research manager for the Reverse Logistics Association and a former UPS employee.

UPS already works in reverse logistics, or returns processing, and with this acquisition, it will get Happy Returns’ more than 10,000 drop-off locations. It’s also adding box-free, label-free returns to its network of UPS Stores. 

Roberson pointed out that having these drop-off locations saves UPS money by allowing it to pick up a bunch of packages in one spot. 

“Instead of having to go door to door to door to pick them up,” Roberson said. “That costs money in terms of time as well as in terms of gas.” 

Happy Returns’ drop-off sites are in existing retail stores, such as Staples and GameStop — places where a UPS driver might already be going to make deliveries. 

“If they’re able to pick up stuff also, that’s a benefit,” said Bloomberg Intelligence analyst Lee Klaskow.

Also, retailers might be willing to pay UPS extra for boxing up the goods, if it means they receive the items sooner. 

“They’re getting the value of getting it back into their inventory, being able to resell it quicker or do whatever they want to do,” Klaskow said. 

He noted that the acquisition also likely gives UPS a bigger chunk of the growing returns market

“They are going to get more freight into their system,” Klaskow said. 

In its earnings call last week, the company noted that an estimated 20% to 30% of all online orders are now returned.

Stephanie Hughes
Stephanie Hughes is a senior reporter at Marketplace. She’s focused on education and the economy, and lives in Brooklyn. She's reported on topics including the effectiveness of technology used by schools to prevent violence, startups that translate global climate data for homebuyers, and why theater majors are getting jobs writing for chatbots. Previously, she worked as a producer for Bloomberg, where she covered finance, technology, and economics. Before that, she worked as the senior producer for “Maryland Morning,” broadcast on WYPR, the NPR affiliate in Baltimore. She’s also reported for other media outlets, including NPR’s “Morning Edition,” “All Things Considered,” “The Takeaway,” and Salon. At WYPR, she helped produce the year-long, multi-platform series “The Lines Between Us,” which won a 2014 duPont-Columbia Award. She’s also interested in using crowdsourcing to create online projects, such as this interactive map of flags around Maryland, made from listener contributions. A native of southern Delaware, Stephanie graduated from the University of Pennsylvania with a degree in communications, studying at the Annenberg School. Before she found her way to radio, she worked in the children’s division of the publishing house Farrar, Straus, and Giroux.