How to reinvent returns? Think outside of the cardboard box

By Joan Verdon | Aug 27, 2019

An e-commerce service company wants to eliminate cardboard boxes from the online returns equation.

Happy Returns, which was founded four years ago with the goal of giving consumers a box-free way to return online purchases, is getting rid of cardboard boxes used to ship bulk returns to retailers and replacing them with reusable totes made from recycled plastic.

“This is going to be a meaningful reduction in the amount of waste that returns generate,” said David Sobie, co-founder and CEO of Happy Returns, which is based in Santa Monica, CA.

Sobie estimates that the totes can be reused between 40 and 100 times, unlike single-use cardboard boxes.

Asia is no longer buying America's trash, so more and more cardboard is ending up in landfills, Sobie said. "With the rise of e-commerce this is a problem that's just getting worse and worse," he said.

The Re-Boxing Hassle

Happy Returns handles returns and processing for roughly 30 retailers. Customers of those retailers have the option of returning unwanted items to Happy Returns “Return Bars”, and getting an instant refund or credit, without the hassle of re-boxing the merchandise and taking it to the post office.

While the Return Bars eliminate the need for the consumer to use a cardboard box to make a return, Happy Returns, up until now, was still using cardboard boxes to ship those returns to its processing hubs, and cardboard to return merchandise to its retail partners.

“We’re eliminating cardboard in two steps of the reverse supply chain,” Sobie said in an interview.

Happy Returns has 400 Return Bar locations, and collects upwards of 8,000 bulk shipments a month, so the shift has the potential to eventually remove that many cardboard shipping boxes from the waste stream. Most of the Return Bars are located in malls, usually at the concierge desk, but store locations and self-service kiosks are planned.

Three Retail Partners

So far, three Happy Returns retail partners have agreed to adopt the reusable tote system – Draper James, the clothing line founded by actress Reese Witherspoon; the designer clothing company Revolve; and the eco-friendly, online shoe company Rothy’s.

Retail partners have to be willing to unpack and store the reusable totes, which fold flat when empty, until picked up by Happy Returns for reuse.

“It was a no-brainer decision for us to sign on,” John Horton, vice president of operations at Draper James, said in a statement. The program, he said, helps Draper James contribute to environmental sustainability.

“Box-free returns align beautifully with Rothy’s ethos,” Heather Howard, vice-president of operations and people at Rothy’s said in a statement. Rothy’s, she said, is “constantly examining how we can reduce waste” and is eager to partner with companies that “prioritize the same goals.”

A 2018 environmental impact study by Yorke Engineering, commissioned by Happy Returns, concluded that providing box-free returns to consumers reduces greenhouse gas emissions by 0.12 pounds per item returned, and reduces the amount of cardboard used by close to 73% by weight and 92% in area.

Sobie and co-founder Mark Geller worked at flash sale website HauteLook. After it was acquired by Nordstrom they worked on the Return to Rack program, which allowed HauteLook customers to return items to Nordstrom Rack stores. That experience convinced them customers hate mailing back unwanted items and love in-person returns.

Returning items has become what Sobie calls an annoying "arts and crafts project" - one that requires shoppers to find the right size box, print a label, tape everything up, and go to the post office. Then once they mail the package, they have to wait weeks to have their refund credited to their account.

At the Return Bars, customers hand in items, give the staff person their email, get a receipt, and the return is processed immediately, using Happy Returns software.

Happy Returns bundles all of the returns it receives together, then sends them in a single shipment to one of its two processing hubs, where the items are sorted by retailer and returned to the retailers' distribution centers.

Return-in-store advantage

Traditional retailers and online giants like Amazon have seen lots of evidence that consumers greatly prefer to make returns in person than experience the headaches of re-boxing and mailing. Having stores that can accept returns of online orders has been an advantage for Walmart and Target in the e-commerce wars. Amazon is seeking a similar edge with a newly launched partnership with Kohl's that allows customers to return online orders at Kohl's stores.

A study released in July by fulfillment and distribution provider Dotcom Distribution found that 84% of consumers said they are more likely to make an online purchase if they have the option of returning the merchandise at a store.

Article was originally published here.