Ecommerce Returns Made Tougher!

The customer is king. But, if the customer frequently returns products, the king could be barred from buying goods further. This is a new phase that the ecommerce giants are entering in. Let’s explore more about it.

What’s Happening?

We all keep purchasing products from Flipkart, Amazon, Myntra and other ecommerce websites. Due to its 30-day easy return and exchange policy, we could place return or exchange requests as often as we wanted. No one was there to judge us. But things have changed now!?

Recently, various complaints have claimed that ecommerce giants blocked accounts due to frequent returns.?

Myntra has been more vocal about the frequent return issue. In a blog, Myntra specified that if the return is higher than average, the customer will have to pay a convenience fee on their next orders. The return score will also impact the Myntra Insider benefits.?

But the question is why? Why is return an issue?

The Issue Behind Frequent Returns

Frequent returns can be expensive for the seller. Let’s understand how.

When we return a product, two costs are involved in the process. First is the cost of delivery which the seller has to pay when the product is delivered to you. Secondly, when you return the product, the seller has to bear the cost of collecting the product from your place to the warehouse. This eats up a part of the revenue.?

Moreover, if the product is claimed as a ‘damage product received’ and the damage is evident, it is a loss for the seller as it cannot be resold to other customers.?

The Cash on Delivery Option

In this digital world, some people prefer to pay cash when the product is delivered. And this is another means of loss for the seller because individuals refuse to pay cash on product delivery. Moreover, the rate of return on cash on delivery products is high than prepaid orders. Hence, Flipkart has started charging a fee of Rs 5 if you opt for cash on delivery.?

For instance, if the delivery man cannot find your address and the product gets returned to the origin, then Amazon charges Return to Origin (RTO) charge to the seller for a failed delivery.?

These extra costs pick a hole in the seller’s pocket every time you hit the return or exchange button.?

According to Economic Times, the average return rate ranges between 15% and 20%.?

• In the apparel category, the returns vary from 20%-30%.?
• About 20%-25% of products come back with damage.?

What’s Next?

The era of easy returns is now coming to an end. Amazon and Flipkart have also narrowed their return window from 30 days to 7-10 days in a certain category. Hence, it is safe to say that in this new phase of ecommerce, giants are trying to tame customers’ habits to keep returns under control and stay profitable.