The era of "refund only" may be coming to an end. Following Taobao, Kuaishou e-commerce also stopped

With the booming e-commerce industry, the "refund only" service has become an important measure for e-commerce platforms to attract consumers. However, the implementation of this policy has also caused a series of problems, such as damage to merchants' interests and frequent return fraud. Recently, following Taobao, Kuaishou e-commerce also announced the cancellation of the "refund without return service", marking the gradual end of the "refund only" era. This article will explore the development history, impact and reasons behind the cancellation of the "refund only" policy.

On November 25, Kuaishou E-commerce released an announcement, announcing that due to business adjustments, the platform decided to cancel the "refund without return service". The service will be discontinued on December 2 for merchants who have activated this service. Merchants can choose to actively terminate the contract before December 2, otherwise, merchants who fail to terminate the contract within the deadline will have their contracts automatically terminated by the platform. For existing orders, the system will continue to execute according to the previous rules.

In fact, Kuaishou E-commerce is not the pioneer in abolishing the "refund but not return service". The farce of "refund only" has been a source of suffering for merchants for a long time.

Previously, Taobao optimized the "refund only" policy in order to enhance merchants' after-sales autonomy. Based on the evaluation of the new experience score, high-quality stores will enjoy preferential treatment with reduced or no after-sales intervention. This series of adjusted rules will officially take effect on August 9.

In 2021, Pinduoduo launched the "refund only" service for the first time in China, allowing users to get a refund without returning the goods. The original intention of this measure was to protect the rights and interests of consumers while screening out high-quality merchants. However, during the implementation process, the "refund only" policy gradually deviated and even spawned a group of "wool parties" who specialized in using the refund mechanism to make profits. Despite this, Pinduoduo did not adjust the policy. As the e-commerce platform market expanded, "refund only" gradually became a common practice in the e-commerce industry. By January 2024, major e-commerce platforms including Douyin, Taobao, JD.com and Kuaishou have also launched similar "refund only" services.

According to the data survey of the China Internet Network Information Center, only 1.06% of merchants have not encountered the problem of "only refund" in the past year, while 7.9% of merchants have refunded as much as 80% in the past year. Therefore, 89.05% of merchants are very opposed to "only refund", and only 1.39% of merchants support this policy.

In sharp contrast is the response of consumers to the "refund only" service. According to a survey by the China Internet Network Information Center, about 25% of consumers will use the refund only service for "taking advantage of the situation", of which 13.39% of consumers use it frequently. Therefore, 35.71% of consumers said they were very satisfied with the service, and another 22.02% of consumers said they were generally satisfied. Overall, consumers have a high degree of support for the "refund only" service.

According to statistics, from 2021 to July 2024, the courts handled about 500 refund-only cases, with the number of cases reaching a peak in 2023. Looking up "refund-only" related cases on the China Judgments Online website, it can be found that the number of cases in which merchants won is greater than the number of cases in which they lost.

The "refund only" problem not only troubles domestic e-commerce platforms, but also causes headaches for foreign e-commerce platforms.

According to data from the National Retail Federation, in 2023, U.S. consumers returned merchandise worth $743 billion, accounting for 14.5% of the products they purchased, up from 10.6% in 2020. About 14% of the returns were fraudulent, costing retailers $101 billion.

In order to curb the expansion of losses caused by "refund only", e-commerce companies have begun to study the evaluation of the applicable groups of "refund only" policies. As Sender Shamiss, CEO of oTRG, said: To make decisions, the algorithm will evaluate multiple factors, including the trust of shoppers based on their previous purchase and return patterns, as well as shipping costs and product demand in the hands of customers.

As of now, certain retailers, including H&M, Zara and J. Crew, have begun charging customers return fees in the past year; some shopping sites, such as Canadian retailer Ssense, have threatened to remove customers who frequently return products from their platforms if they suspect they are abusing the policy; Amazon has begun to limit its "refund only" feature to products under $75, while Walmart lets sellers set their own price limits for its refund-only service and decide who qualifies for this service.

By Eric