Investing.com -- UPS announced Tuesday a partnership with TikTok Shop to offer exclusive no-box, no-label return services for sellers on the social commerce platform in the United States. The delivery company competes with FedEx to provide specialized services that generate higher profits than standard e-commerce deliveries.

UPS and FedEx have both focused on reverse logistics services to help retailers manage return costs, which average 27% of a product's purchase price, according to Blue Yonder, a returns-management software company. Amazon.com also provides no-box, no-label returns.

The retail industry saw approximately $850 billion in total returns in 2025, with nearly 20% of online sales being returned, according to the National Retail Federation.

TikTok Shop launched in the U.S. in September 2023 and has attracted sellers including Ulta Beauty and PacSun. Sellers use advertisements and sponsored influencers to market products to TikTok users.

Customers using Happy Returns can bring unwanted items to nearly 10,000 returns locations inside Ulta Beauty, Staples, or UPS stores. Workers scan, bag, and label items that are then combined in large boxes and sent daily to processing hubs.

The Happy Returns service is available to participating sellers whether they manage their own fulfillment or use TikTok Shop's fulfillment services, 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.

David Sobie, co-founder and CEO of Happy Returns, said the partnership provides TikTok Shop sellers with reduced return fraud, faster inventory turnaround, and an improved returns experience. Happy Returns uses artificial intelligence to identify fraudulent returns by flagging suspicious packages and analyzing their contents before human auditors verify the fraud and withhold refunds.