E-commerce industry insiders say 15-25% of products bought in the fashion category are returned, and each time a buyer returns a product, the e-tailer’s logistical cost escalates three times.
Fahad Javed, 25, who sells electronic products on Amazon, Flipkart and Snapdeal, says he is bogged down by returns and cancellations and the ease with which e-commerce players take back goods without questioning buyers.
“We see people buy a phone worth Rs 8,000 plus, use it for a month and return it once they get a better deal somewhere else,” says Javed. around 3-5% of products he sells online are returned every month, he adds.
But things are set to change. E-commerce firms are trying to put in place better checks around their ‘no questions asked’ return policy to dissuade its abuse.
People in the e-commerce industry say 15-25% of products bought in the fashion category are returned and, each time a buyer returns a product, the e-tailer’s logistical cost escalates three times. Along with cash on delivery (COD), the ‘no questions asked’ return policy has worked like magic to attract buyers.
Praveen Sinha, founder, Jabong, says he feels only 5% shoppers are misusing the feature — and that’s why the industry has not put in place a policy to keep unwarranted returns at bay.
“Though its important to have a customer-centric return policy, we are slowly making it robust to avoid putting financial pressure on the system. We can’t let five people out of 100 to have fun at our cost, as the system is not scalable,” said Sinha.
To make buyers take more informed decisions while buying, Jabong is improving its product catalogues and adding new features, such as showing products with a video.
Other portals, such as Amazon, Myntra and Shopclues, have also taken steps like tracking buyer behaviour and blacklisting some to curb the practice. “There is a need to track user behaviour to safeguard our business interest. We have a process in place to track return reasons and at a product level this is shared with the sellers as well,” said Radhika Aggarwal, co-founder, Shopclues.
The company says it has a specialised team to handle returns and provide information to sellers in such cases.
Alok Mittal, earlier an investor at Canaan Partners, said, “At this point there is money available for businesses to allow returns, which creates a consumer behaviour. But five years down the line, when the market starts to mature, can a business optimise on that cost? At some point you have to rationalise this and put some checks and balances.”