Happy Returns, the UPS‑owned reverse‑logistics company, has begun testing a new artificial‑intelligence system called Return Vision that scans returned items for signs of fraud. The pilot, which started on December 18 2025, is running with three high‑profile retailers—Everlane, Revolve and Under Armour—through the peak holiday return season.
Return Vision compares each package to the original product listing, assigns a risk score, and forwards high‑risk items to a human auditor who reviews photographs and product details. The combination of machine learning and human verification is designed to catch fraud that would otherwise slip through automated processes, thereby protecting partners from costly chargebacks and improving the speed of legitimate refunds.
The tool tackles a $76.5 billion annual fraud problem that plagues U.S. retailers during the holiday season. By reducing fraudulent returns, Happy Returns aims to lower chargeback costs and increase operational efficiency across its box‑less return network, a key component of UPS’s broader strategy to deepen its presence in the growing e‑commerce logistics market.
The pilot will run through the end of the holiday period, after which Happy Returns will evaluate performance metrics—including fraud detection accuracy and impact on processing times—before a broader rollout slated for 2026. The company is also gathering data on how the system affects chargeback volumes and overall cost savings for participating retailers.
Return Vision differentiates itself from competitors by integrating AI with a physical audit step. While Amazon and Walmart offer automated return solutions, Happy Returns’ approach adds a human review layer that verifies product authenticity, giving retailers a more reliable safeguard against sophisticated fraudsters.
"If you’re returning a pair of $300 boots and you show up with a pair of dirty old sneakers, that should be caught immediately," said Jim Green, Director of Logistics and Fulfillment at Everlane. David Sobie, CEO of Happy Returns, added that the system “helps 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 refund.” UPS CEO Carol B. Tomé noted that the partnership “strengthens our box‑free, label‑free return network and expands our service footprint to more than 12,000 convenient locations.”
The launch signals a significant step for UPS and its partners, positioning Happy Returns as a leader in secure reverse logistics. By addressing a multi‑billion‑dollar fraud problem with a hybrid AI‑human solution, the company is poised to deliver tangible cost savings and a smoother return experience for retailers and shoppers alike.
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