COMPANY OVERVIEW

Happy Returns is a company that provides centralized, in-person return services for online retailers. The California-based startup sets up return kiosks in high-traffic areas such as shopping malls to accept returned items in person for online retailers and give the customers making the returns an immediate refund.

Source: Happy Returns

In April 2016, Happy Returns opened its first Return Bar at the Santa Monica Place mall in Santa Monica, California. In a 10-by-12-foot kiosk, the company’s “returnistas” accept items and process refunds for customers on the spot. The items are then shipped in bulk back to the e-tailers that sold them. The company is now accepting returns for its first client, Tradesy, an online consignment site, and it is in talks with several other e-tailers.

REVERSE LOGISTICS CHALLENGE

Reverse logistics are a challenge for retailers. Returns were estimated to have totaled $260.5 billion in 2015 in the US alone, according to the National Retail Federation (NRF). Online pure plays see return rates of approximately 30% of total purchases in categories such as apparel and accessories, whereas physical stores see return rates of about 15%. And returns are costly for retailers. On average, one dollar of goods returned translates to only about 20 cents of value when factoring in credit-card fees, labor costs to prepare the goods for resale and shipping costs, according to industry experts. The industry also has to absorb as much as $15.9 billion of fraudulent returns. Online pure plays suffer more than brick-and-mortar retailers do because they cannot institute a proper in-person inspection and return process.

Source: NRF, 2015 Consumer Returns in the Retail Industry Survey

BUSINESS MODEL

Happy Returns has created a mutually beneficial model that:

• Provides in-store return solutions for e-tailers that do not have physical stores.
• Reduces return costs by charging retailers fees and centralizing the shipping process.
• Improves retailers’ customer relationships through a better return experience. Customers do not have to print shipping labels, go to a post office or shipper, or wait for their refunds.
• Increases traffic to malls and shopping centers, some of which may convert to additional sales.
• Decreases fraudulent returns by adding an in-person inspection process for online retailers.

Source: Happy Returns

MANAGEMENT TEAM

Co-Founders David Sobie (CEO) and Mark Geller (COO) are both e-commerce veterans. Their career paths intersected at HauteLook, where Sobie served as SVP of Marketing. Sobie has held senior marketing roles at several e-commerce companies, including JustFab and REVOLVE. Geller was previously the Head of Mobile at HauteLook, where he ran HauteLook’s Return to Rack program, which generated about 1 million visits to Nordstrom Rack stores.

FUNDING

Happy Returns raised a seed round of $1.9 million, led by Southern California–based venture capital firm Upfront Ventures.