PayPal Bets $11M On Company That Handles Returns

Online payment processor Paypal Holdings Inc PYPL invested $11 million in Happy Returns, a physical provider of return and logistics solutions for retailers and customers.

What Happened

Items bought online are three to four times more likely to be returned compared to in-store purchases, PayPal and Happy Returns said in a joint press release. Happy Returns addresses this challenge by operating a nationwide network of "Return Bar" locations. Consumers are able to bring eligible items they wish to return to a store for an immediate refund and a hassle-free transaction.

Happy Returns oversees more than 350 locations, located mostly in malls, college campuses, and in some cases stores like Cost Plus World Market. Some of its online store customers include Eloquii, Untuckit and Rothy's.

Why It's Important

The investment is made through PayPal's venture capital arm and represents a "huge validation" for Happy Returns' business, company co-founder and CEO David Sobie told CNBC. PayPal's investment "speaks to the broader challenges" of retail to create a new online buying process that can be "as easy and frictionless as possible."

"Happy Returns has reengineered the return process with the customer in mind and that brings greater cost savings and efficiencies to merchants," said Robert Clarkson, Vice President, North America at PayPal.

Working with Happy Returns will help PayPal understand how to better help its customers address the "growing problem" of handling returns, Clarkson said.

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