UPS adds key feature for TikTok Shop ahead of the holidays

United Parcel Service (UPS) is moving its Happy Returns business directly into TikTok Shop (TIKTOK), which is one of the fastest-growing shopping channels in the U.S. Sellers on the platform can offer shoppers box-free, label-free returns at about 10K drop-off points nationwide, called Return Bars, inside UPS Store, Ulta Beauty (ULTA), and Staples locations.

This is the first time Happy Returns has been plugged directly into a commerce platform like TikTok Shop. Until now, it connected through individual retailers’ own websites. Everlane, Windsor, and Pacsun are some of the first retailers using the feature on TikTok Shop.

For shoppers, the process is simple. A customer starts a return in the TikTok Shop app and gets a QR code. They then take the item, without packaging, to any Return Bar and scan the code. The drop-off is confirmed right away, and the customer can track the return and refund in the app. At the counter, workers scan, bag, and label each item. The items are packed together into larger boxes and sent daily to processing hubs, which saves retailers time and money.

The service works for sellers who ship their own orders and for those who use TikTok’s fulfillment service. On orders fulfilled by TikTok, Happy Returns is turned on by default, so there’s nothing to set up. TikTok says the setup lets sellers avoid the cost and complexity of building their own returns operations. Fraud prevention is also a feature as Happy Returns uses an AI tool that flags suspicious returns and analyzes what’s inside.

For UPS (UPS), the deal fits a larger plan. The package delivery giant company is competing with rivals like FedEx (FDX) to offer specialized services that earn more profit than ordinary e-commerce deliveries. The Happy Returns business also brings foot traffic to The UPS Store locations and adds package volume to the UPS (UPS) network.