Looking to create more of an end-to-end ecommerce solution and move beyond the perception that it’s a payments platform only, PayPal has acquired Happy Returns, which consolidates returns for its retail customers via a national network of mall and store collection points.
Sensing encroaching into payments from Amazon, Apple, Google, Facebook and others, PayPal began expanding its offerings in recent years to provide a broader value proposition for merchants. It led a 2019 investment round in Happy Returns that netted the company $11 million.
A startup launched in 2015, Happy Returns has a network of more than 2,600 dropoff locations in the U.S., in more than 1,200 cities and towns in every state. The company got a major boost by adding more than 2,000 FedEx locations in an October 2020 deal, including 300 inside Walmart stores.
“The post-purchase experience and returns is one area of the customer journey that we have had our eye on for a while and have heard from merchants that the need for solutions has increased during the recent shift to online commerce,” said a PayPal spokesperson. “The innovative Happy Returns team will serve as the nucleus for PayPal’s post-purchase offerings to merchants and consumers.”
PayPal CEO Dan Schulman outlined part of the company’s strategy in expanding more broadly into ecommerce at a recent investor’s day, saying the company’s platform will enable merchants to “embrace a digital-first commerce strategy” across all channels.
“[That’s] where we are now evolving from being a pure payments platform really to a digital commerce enablement engine,” Schulman said. “The great thing is we are now seen as a strategic partner to our merchants, and our conversations have moved from how do we improve checkout conversion, which by the way we’ll always do, but really now, how can we use our platform capabilities across a merchant’s full customer experience from engagement to loyalty and help them drive incremental sales in the digital era.”
With the addition of Happy Returns, a startup launched in 2015, PayPal’s commerce platform now extends from offers and deals, using coupon finder Honey (acquired in 2019 for $4 billion) through payments (PayPal and Venmo) and now to returns and exchanges.
Happy Returns CEO David Sobie said his company will continue to service its hundreds of retail customers, and will benefit from PayPal’s scale and resources, enabling it to expand its footprint and improve its platform.
“This is just the beginning and there is still a lot to determine but as part of PayPal we will have access to their 31 million merchant relationships,” Sobie said.