By Lisa Baertlein

LOS ANGELES, Sept 29 (Reuters) - UPS on Tuesday said it had inked an exclusive deal to provide no-box, no-label returns for the fast-growing TikTok Shop network of US sellers as it competes with rivals like FedEx to provide specialized services that generate more profit than typical e-commerce package deliveries.

Parcel delivery firms like UPS (UPS.N) and FedEx (FDX.N) each have targeted so-called “reverse logistics” services that help retailers reduce the steep cost of returns, which average 27% of a product’s purchase price, according to Blue Yonder, a returns-management software company. Amazon.com (AMZN.O) also offers no-box, no-label returns.

Total returns for the retail industry amounted to roughly $850 billion in 2025 and nearly 20% of online sales are returned, according to the National Retail Federation.

TikTok Shop, launched in the US by the popular social media platform in September 2023, has attracted sellers such as retailers Ulta Beauty (ULTA.O) and California-style retailer PacSun. Vendors use ads and sponsored influencers to market their products to TikTok users.

Happy Returns users take unwanted items to any of the nearly 10,000 “returns bars” inside Ulta Beauty, Staples or UPS stores, where workers scan, bag, and label items that are then combined in large boxes and sent daily to processing hubs, saving retailers time and money.

The Happy Returns service is available to participating sellers regardless of whether they handle their own fulfillment or outsource it to TikTok Shop, the companies said.

“Our collaboration with Happy Returns builds on our commitment to making the returns experience faster, hassle free, and more trustworthy for our shoppers,” said Patrick Nommensen, TikTok Shop’s president of strategic initiatives.

For TikTok Shop sellers the partnership means less return fraud, faster inventory turnaround and a returns experience that builds loyalty, said David Sobie, co-founder and CEO of Happy Returns. Happy Returns uses an AI tool to find fraudulent returns by flagging suspicious packages, analyzing their contents, and sending them for final audit by humans who can verify the fraud and withhold the refund.

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