A "hunting feast" for double 11 by combining orders and refunding

This should have been a shopping event of buying at low prices, but it has unknowingly turned into a complicated game of refunds. This article explores the delicate relationship between consumers, merchants and platforms during the Double 11 shopping festival, as well as the economic logic and potential problems behind this shopping feast, for your reference.

"Sold 9999+, received 0", Ralph Lauren certainly didn't expect that he would be outed in such an embarrassing way.

During this year's Tmall Double 11, Taobao issued several large-value coupons for 88VIP users, but the maximum threshold for use was 7,000 yuan. If you don't actually buy that many things and you still need to meet the threshold for discounts, you can only find some shopping tools to make up for it. Ralph Lauren, which has a relatively high unit price and supports extremely fast refunds, has been praised by many netizens as a shopping tool.

Searching for "Ralph Lauren" on Xiaohongshu is closely linked to "adding a purchase and refunding", and many people skillfully add Ralph Lauren to their cart, submit, pay, and refund while saying "sorry". Some merchants even proactively offer users tips, asking them to add a purchase and refund other products.

Consumers placed orders to return products and used consumption coupons by taking advantage of the full-discount rule; the platform transaction data jumped up once and was finally accumulated into the Double 11 battle report data; Ralph Lauren, whose products were returned, ended up with nothing, and the return rate increased by several percentage points.

It seems that in this year's Tmall Double 11, only Ralph Lauren's injured world was achieved.

Is this really the case?

If such a phenomenal promotional "feast" is not adequately managed, it may be regarded as "platform acquiescence" and get out of control. Consumers have spent more time and energy on the complicated order-matching rules. It is not just Ralph Lauren that acts as a tool for order-matching. The profit margins of merchants who actually make transactions have shrunk again due to the increase in full-reduction discounts. If we continue to extend this, will the merchant group trigger a new round of bad money driving out good money? It seems that order-matching has led to a national carnival, but the butterfly effect of instant refunds has pushed full-reduction discounts to a point of fishing in a dry pond, with everyone suffering.

In short, there are voices about the "side effects" of returning goods after adding to a purchase every year, and there are particularly many this year.

This seems to remind rule makers that it's time to step on the brakes.

01 Is it worth following the tutorial to squeeze out the discounts?

The underlying logic of the "full-order discount" is to drive consumers to convert non-existent demand into short-lived orders. 99% of these orders do not have the basis and willingness to complete the transaction. After payment, the goods that are added to the order will be quickly cancelled.

Using the full-discount policy will save more money, but there are additional steps of adding and refunding, and the platform rules are constantly adjusting, so more and more consumers are trapped in the full-discount rules.

It is undeniable that Taobao issued 1500-120, 3000-240, 5000-400, 7000-560 different levels of coupons to 88VIP users in order to guide users to use them as needed. However, from the perspective of human nature, since we can collect 5000, why not try to collect 7000 and use a larger coupon?

In actual practice, there are many users who use maximum deductions to make up for the difference in order to complete an order, as can be proven by the various tutorials on refunding for making up for the difference in order to complete an order on Xiaohongshu.

The more you put together, the more complicated the situation becomes. If you want to squeeze out every bit of discount from the purchase, you may not be able to do it without some talent for math. You can find many tutorials by searching on social media. Ralph Lauren became one of the top sellers because of its easy purchase and return. Brand stores such as Nike and Adidas are also regarded as qualified tools for purchasing.

There are top students who can make a purchase, and there are also poor students. In addition to the tutorials, there are also many complaints about the time-consuming and laborious nature of making a purchase. For example, the 7,000 yuan threshold for making a purchase is too high, and the multiple discounts require careful calculation, "I worked hard like a tiger, but the discount is only 15 yuan."

Moreover, it is not enough to test one’s ability to use hands and brains, but netizens also complained about “ineffective order formation”. After trying their best to reach the discount threshold, some people encountered the situation that the goods could not be purchased at the payment time, while others claimed that big data was used to cheat the familiar.

Xiong Chumo also discovered another mysterious operation while shopping passionately.

I don’t know if there is a bug in the full discount rules or if it is just the platform mechanism. After using the 88VIP coupons, the transaction amount of the goods on the order details page is not the actual payment, but the coupons are included. The actual payment for the goods that are displayed as 747.2 yuan is 694.53 yuan. This can easily mislead consumers and give them the illusion that the full discount has not taken effect.

All discounts and gifts for placing orders over a certain amount actually have their values ​​secretly marked.

As the threshold for placing an order becomes higher and the discount for a certain amount of purchase increases, the discount for a certain amount of purchase has gradually become a sweet burden for consumers. The rising cost of time and energy makes it difficult for consumers to experience the fun of the Double 11 holiday by placing an order. Instead, they begin to think and question whether it is worth wasting time and effort to return the goods in order to place an order.

02 “Failure on Double Eleven”, why?

Consumers recognize the "account-adding tool" with a hint of sarcasm, but this preference is quite a burden for merchants.

In the past two days, the trending search #Stores with annual sales of over 20 million collapsed on Double Eleven# has caused many e-commerce people to sigh. According to Phoenix Finance, Lin Dong, who had run a women's clothing store for seven years, decided to close the store. The key problem that crushed the store was the high return rate, which soared from 30% to 70% or even 80%. This not only consumed a lot of his energy and time, but also caused a sharp decline in profits. The store owner believes that "the surge in return rates has a lot to do with the platform's connivance."

We can indeed see some clues from the functional design of the platform. In the process of "evolution", Taobao Tmall launched functions such as screening for full discounts, group purchases, and quick refunds, which inadvertently made the consumption behavior of group purchases and refunds more convenient.

When the practice of adding items to a purchase and returning them became a common habit, and during the Double 11 promotion, the Ralph Lauren shopping stunt of easy additions and easy returns was discovered by everyone.

As the threshold for discounts increases and more orders are placed, the corresponding return rate increases. Some merchants do not understand this and shy away from it; others encourage users to place orders and “roll up” with their peers in order to boost their own sales.

According to Xiong Chumo, unlike Ralph Lauren, a big brand, which readily returns orders, small and medium-sized merchants have been suffering from order-mixing for a long time. On the one hand, they are psychologically resistant to order-mixing, and on the other hand, they are worried that the orders returned by Miaopai will affect the store's exposure and rating. Therefore, merchants will deliberately avoid some price ranges that are easy to be ordered, such as removing products around 280 yuan from the shelves. Not only does it cause conflicts between merchants and consumers, but in the national carnival of full discounts, order-mixing returns may also evolve into a tool for vicious competition among merchants. A Xiaohongshu netizen revealed that a merchant "instigated" himself to make orders and then return other stores' products, without considering whether the business of other stores would be affected.

Lin Dong also mentioned that the sales did increase in the early stage of the Double 11 event with the help of traffic dividends, "but this is only a short-term false prosperity. The return rate is still high and there is no hope of making a profit."

Even if there is an increase in real transactions due to the combination of purchases, profits will be cut several times due to the superposition of various discounts. Lin Dong said that the platform's 300-50 discount for purchases and the store coupons provided for participating in Double 11 are an unbearable burden on store profits. For a product worth more than 400 yuan, the gross profit during Double 11 may only be "about 10 yuan."

Based on information from all sources, Lin Dong’s situation is not an isolated case.

Fengchao's prospectus shows that "the number of e-commerce reverse parcels was 3.6 billion in 2019, increasing to 8.2 billion in 2023, and is expected to reach 20.9 billion in 2028."

In 2023, 8.2 billion items will be returned on e-commerce platforms every year. Among them, clothing is particularly prominent. According to media reports, data from Semir Clothing showed that in 2020, the return rate on its Tmall platform was 31%; in the first half of this year, the return rate on Tmall rose to 62%.

Whether it is tacit consent in the rules or convenience in functions, the merchants who are refunded for group-buying are helpless, while the merchants who make group-buying transactions have their profits shrunk. Affected by the butterfly effect of group-buying, in their eyes, there is no good business in the world, especially when big sales come, it even becomes a burden.

03 Can I get a refund for a combined order tomorrow?

The "discount on spending above a certain amount" is a "great" invention, but "great" should be put in quotation marks.

Theoretically, thanks to the full discount for group purchase, consumers enjoy more affordable prices, merchants' sales data will be further improved, and the platform's Double 11 transaction volume will be more gratifying. This is a win-win situation, and group purchase plays a key driving force in this positive growth closed loop.

According to the analysis in the previous article, too much is as bad as too little. With the continuous increase in the amount year by year, on the surface, the beneficiaries are merchants, ordinary consumers and 88VIP users. However, if we dig deeper, we will find that the victims of the "side effects" are precisely the same group of people.

Furthermore, if the rules encourage people to place orders together to get discounts, it is likely to fall into a vicious cycle.

Because the profits of merchants have been severely cut, there may be more price increases followed by promotions, which may also lead to more merchants leaving, exacerbating the expulsion of good money by bad money, and consumers will be further away from truly affordable goods. By then, the cost-effectiveness of the full-order discount will be further weakened, and consumer enthusiasm will be difficult to mobilize.

The bilateral ecology on which e-commerce platforms depend for survival will be shaken, which will actually affect the development of the entire industry.

So the question is, why is the platform unwilling to step on the brakes?

This brings us back to the old topic: the lack of growth in traditional e-commerce. Third-party data shows that the total sales of the entire network during the 618 shopping festival this year fell by 7% year-on-year, and the sales of several comprehensive e-commerce companies fell by 6.9% year-on-year. Some media reported that there was even a "wave of store closures" in women's clothing stores on e-commerce platforms.

There are few surprises in the long-term growth, so the current story must be told well. As the most direct means to stimulate consumption, the "full-order discount" must be used to the extreme. In the short term, the "full-order discount" will continue to contribute good transaction data to the platform. If nothing unexpected happens, this year's battle report will still show multi-dimensional year-on-year growth. However, the growth anxiety under the prosperous times has not been eradicated.

The platform must understand the principle of drinking poison to quench thirst. However, faced with the industry cycle and its own development limitations, the platform seems unable to find a better solution for the time being.

This is also the reason why the e-commerce market has been in turmoil recently.

In order to regain high growth, Taobao chose to compete with Pinduoduo for low prices. After following for a period of time, it found that the path of simply low prices across the entire network was not suitable for its own ecology. So it turned around and changed back to allocating search weights based on GMV. The refund-only rule that followed the launch brought double pressure of mixed reviews, and the platform once again tasted the pain of transformation. In response to the high return rate, the platform is also trying to improve the business environment for merchants. For example, Taobao launched the "Return Treasure" before Double 11 to reduce the return costs of merchants.

This year's Double 11 shopping festival, which is the longest in history, has a 300-50 discount on the platform and a large discount subsidy for 88VIP users, all with the aim of reversing the sluggish consumption trend and alleviating growth anxiety. However, in the process of implementation, some "side effects" that went against one's will were clearly revealed.

The moon waxes and wanes, this is a natural law and also a business law. The e-commerce market should accept it calmly, especially as a platform that used to be the big brother, less anxious, more sincere, return to the essence of e-commerce, and continue to optimize prices, goods and services.

After all, refunding a purchase will not give you the tomorrow you want.