Happiness received mixed reviews from music critics. The album debuted at number four on the UK Albums Chart, selling 25,493 copies in its first week—the fastest-selling debut album of 2010 by a band in the United Kingdom. It reached number one on the Greek Foreign Albums Chart, number two in Austria, Germany, Poland and Switzerland, and the top ten in Denmark, Finland, Ireland and Sweden. Happiness has sold 169,710 copies in the UK and over two million copies worldwide.
"Better Than Love" was released as the lead single on 23 May 2010 in the United Kingdom. It spent one week at number fifty on the UK Singles Chart, and charted in Belgium, the Czech Republic and the Netherlands.
The second single, "Wonderful Life", was released on 22 August 2010 in the United Kingdom. It was previously released as the band's debut single in Denmark on 3 May 2010. According to lead singer Theo Hutchcraft, the song is about two extremes, "the first being a man who wants to kill himself and the second being love at first sight." The song debuted at number twenty-one in the UK, and peaked at number two in Germany. It reached the top ten position in Austria, Denmark and Switzerland.
"Stay" was released as the third single on 15 November 2010, and peaked at number fifty on the UK Singles Chart on 21 November 2010.
"Sunday" was released as the fourth single on 27 February 2011.
The album's fifth single, "Illuminated", was released on 1 May 2011 as a double A-side with a re-release of "Better Than Love".
"Blood, Tears & Gold" was released exclusively in Germany, Austria and Switzerland on 7 October 2011 as the album's sixth and final single.
Happiness received positive to mixed reviews from music critics. At Metacritic, which assigns a normalised rating out of 100 to reviews from mainstream critics, the album received an average score of 58, based on 9 reviews, which indicates "mixed or average reviews".Alexis Petridis from The Guardian gave the album two out of five stars and wrote, "You get the feeling Hurts have spent more time making their backstory interesting than their music", and that on some tracks lead singer Hutchcraft sounds like "one of those puppets that advertises Dolmio, but in the throes of a romantic crisis". Dorian Lynskey of Q magazine also gave a mixed review, stating that the duo "learn all the wrong lessons from the 80s" and calling the album "a depressingly ordinary package of overblown melodies and musty lyrical cliches [...], expensively ribboned with choirs and orchestras. Teddy Jamieson of The Herald noticed that the band has "an ear for a hook, but Happiness feels very synthetic (and not in a fun, sci-fi way)" and that "beneath the synthy exterior lurk orthodox song structures, big choruses and a join-every-dot desperation for pop stardom", however he felt that "there are a couple of flashes of wit and intelligence buried in the album". Andrzej Lukowski of Drowned in Sound complimented the singles "Wonderful Life" and "Better Than Love", but felt that elsewhere the record is not "desperately fun" and found "the music thin" and "the embellishments desperately gauche". Andy Gill of The Independent gave the album three out of five stars and wrote, "It's efficient and stylish, but lacks innovation: music that moisturises a touch too much." Fiona Shepherd from The Scotsman said that the duo "look and sound out of time – and they probably like it that way" and described the album as "urbane but banal pop" with an occasional "21st century reference".
Sam Shepherd of musicOMH gave the album three stars out of five and said that "there's a melancholy seam that runs throughout the album that, in conjunction with the polished production, succeeds in achieving a glacial grandeur to each of these songs" and noticed that "appalling ballads in the shape of 'The Water' and 'Unspoken' will almost certainly be overlooked in favour of the classy sounds of 'Wonderful Life' or the glorious pulsing anthem of 'Better Than Love'". Simon Gage of Daily Express felt that the songs are "thoughtful, melancholy [sic] and very modern" and noticed that the album has "a real sense of style that's been missing in British pop for some time". Luke Lewis of the NME awarded the album eight out of ten, praised the songs as "fearsomely well-crafted" and "as clean-lined and immaculate as a well-cut suitwrote" and described the album as "billowing, escapist nonsense that raises your heart rate, slaps a smile on your face and sounds godlike when drunk". Joe Copplestone of PopMatters said that the duo sings "simple lyrical messages of love, pain and yearning that most pop acts could not deliver sincerely if they tried" and claimed that they "have probably released the 'coolest' album of the year", giving it nine out of ten.