UPS on Wednesday announced that it bought reverse logistics start-up Happy Returns from its previous owner PayPal for an undisclosed sum. The deal is expected to close in the final quarter of the year.

Happy Returns, which helps online retailers offer customers box-free returns, will integrate its services with UPS, namely including UPS stores in its fleet of drop-off locations. Happy Returns was previously acquired by PayPal in June 2021 for an undisclosed sum.

UPS’s acquisition of Happy Returns comes as the cost of returns increases and more retailers invest in software firms for cost-effective solutions. UPS has made smaller moves into the returns ecosystem in years past. In 2016, the logistics giant bought a stake in returns management platform Optoro, which runs a self-service portal for customers to generate their own shipping labels and offers warehousing operations for brands.

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