PayPal is expanding its return program, both digitally and physically.
Global online retail sales totaled $4.9 trillion last year with a forecast to grow over 50% within the next for years, according to Statista.
The majority of those dollars came through mobile avenues. In 2021, $3.56 trillion in e-commerce sales were made from mobile users. E-commerce sites have been optimizing their mobile experiences to increase online sales, and their efforts are working.
A survey from Shopify suggests that retailers are seeing revenue from digital sales that are almost equal to their physical-store sales. This development has led to brands investing more in omnichannel tools.
Shopify also estimates that 41% of brands will increase their paid-search budgets this year, investing more in e-commerce to increase their online presences.
The catalyst for the uptick in e-commerce has been the pandemic and lockdowns, which forced consumers to turn to e-commerce to avoid contact with others as much as possible.
But the increase in e-commerce spending brings with it some of the same problems that brick-and-mortar retailers experience.
PayPal Broadens Happy Returns Footprint
Earlier this week, PayPal (PYPL) – Get PayPal Holdings, Inc. Report said it would expand its Happy Returns return and exchange portal software, offering the service to merchants at no additional cost.
The company also said it had partnered with Ulta Beauty to increase the total number of Happy Returns Return Bar locations to more than 5,000.
The company estimates that average return rates have increased to more than 20% as online shopping accelerated during the pandemic.
PayPal says this makes it more important than ever for the purchase-return process to be seamless.
“As return volumes continue to increase, this is a crucial time for merchants to implement efficient and cost-effective solutions that better equip them to manage the growing role returns play in retail,” said David Sobie, the payment-solutions specialist’s vice president who manages Happy Returns by PayPal.
“By offering the Happy Returns software free of charge, we are delivering a post-purchase solution for merchants that helps them retain revenue and gives them a competitive edge in today’s market.”
Happy Returns software automates returns and exchanges and provides “a more user-friendly customer flow.”
PayPal estimates that American consumers returned more than $218 billion of online purchases in 2021. That deluge can create immense logistical challenges and costs for retailers, especially small online businesses that may lack the necessary resources.
Ulta Beauty and Physical Return Bars
The second part of PayPal’s expansion deals with physical Return Bars and that program’s expansion to Ulta Beauty stores.
Given the option, more than 70% of online returners choose to visit a Return Bar rather than sending back items via mail, according to PayPal.
To meet the demand, PayPal will introduce Return Bars in more than 1,300 Ulta Beauty retail locations nationwide. That expansion gives PayPal more than 5,000 Return Bars nationwide.
What does Ulta Beauty get out of the deal? More foot traffic.
“Our pilot with the innovative return platform reinforced the value simplified, in-person returns offer consumers and retailers alike,” Kecia Steelman, the cosmetics major’s chief operating officer, said in a statement.
“We’re encouraged by the increased store traffic and in-store engagement the partnership drives. This is a winning opportunity for our guests, our brand and Happy Returns.”
