PayPal invests in online returns start-up

A company that makes it easy for customers to return unwanted online goods has completed its largest funding round to date.

PayPal is investing $11 million in Happy Returns, which operates more than 350 Return Bars locations in malls, on college campuses and in such stores as Paper Source, Sur La Table and Cost Plus World Market.

“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 us learn more about how returns can decrease the friction in shopping online and how to help merchants address this growing problem.”

Happy Returns’ Full Stack Returns solution, a combination of software, services and logistics, enables consumers to return products in-person through Happy Returns’ Return Bar locations as well as through the retailer’s own stores or by carrier. The suite has been adopted by digitally native brands such as Rothy’s, Everlane, and Parachute Home. The volume of returns and exchanges processed by Happy Returns has grown 800% year over year, the company said, and to support this growth, it has opened two regional Return Hub facilities, in Blandon, Pa., and Van Nuys, Calif., for processing and aggregating returns.

“Our mission is to make returns more delightful for consumers, more cost-effective for retailers, and more sustainable for the planet,” said David Sobie, co-founder and CEO at Happy Returns. “We’re thrilled to work with PayPal to make the process of returning more seamless for shoppers and our service more broadly available to PayPal’s large network of merchants.”

Happy Returns’ existing investors U.S. Venture Partners and Upfront Ventures also participated in the latest round of funding. Since its founding in 2015, Happy Returns has raised a total of $25 million.