"UPS is cutting Amazon deliveries by more than 50% in 2026 and pivoting hard toward something more profitable: handling returns. The Happy Returns subsidiary has added 1,700 locations, bringing its nationwide network to 10,000 drop-off points for online purchase returns."
"Americans returned around $706 billion worth of goods in 2025, and handling returns offers higher margins than low-value deliveries. Happy Returns can send 20 returns together to a single processing facility, translating to better margins."
"Happy Returns processes millions of returns monthly using box-free, label-free drop-offs. The company uses AI to verify high-value returns are authentic before issuing refunds, cutting down on fraud."
UPS plans to cut Amazon deliveries by over 50% in 2026, shifting focus to handling returns through its Happy Returns subsidiary. This move is driven by the high volume of returns, which amounted to $706 billion in 2025. Happy Returns has expanded its network to 10,000 drop-off points, allowing for efficient processing of returns. The company utilizes AI to authenticate high-value returns, reducing fraud. This strategy aims to improve profit margins by consolidating returns rather than making multiple low-value deliveries.
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