Taobao only refunds the money it receives for rectification, and comes up with a "black and white list"

Taobao recently made important adjustments to its refund-only policy, aiming to better balance the rights and interests of merchants and consumers. These adjustments include setting up a whitelist for merchants with excellent service experience, and establishing a blacklist to combat malicious refund behavior, thereby protecting merchants from unnecessary losses.

E-commerce platforms are collectively correcting their refund-only policies.

According to the news from Zizibang, Taobao will make a series of adjustments to the refund-only policy starting last week. On the merchant side, for merchants with higher service experience scores, the platform encourages merchants to negotiate with consumers first, and adjusts the model to exclude situations where the product does not require a refund-only policy and consumers have not requested a refund-only policy. On the user side, the refund-only policy submitted by consumers with abnormal behavior will be rejected, and the platform will manually review refund-only policies for higher amounts.

In simple terms, Taobao took a step back and gave more refund processing rights back to merchants. It opened a whitelist for merchants with better service experience to prevent high-quality merchants from being accidentally hurt by the refund-only policy; at the same time, it opened a blacklist to block the loophole left by the refund-only policy for malicious users.

Merchants that provide excellent services will be included in the whitelist, while the blacklist that intercepts freeloaders and only refunds high-value merchants is shared by all merchants. This universal rule also applies to small and medium-sized merchants.

At the end of last year, Taobao launched a refund-only service for shipped products. However, as refund-only services have become the standard for major platforms, "taking advantage of refund-only services" has become a mature business chain. Even some ordinary users have begun to take refund-only services for granted and take advantage of the small benefits of refund-only services. In the long run, the operating costs of merchants will inevitably rise sharply.

Ultimately, the costs will be passed on to consumers. One merchant said that he now directly includes the loss of refunds in his profit calculation. For example, if the refund rate of a product with a unit price of 100 yuan is only 4%, he will directly increase the price by 5 yuan to recover the loss of 400 yuan.

"Refund only" originated from the "refund without return" service launched by Amazon in the United States. The purpose is to encourage consumers to place orders by reducing the return process.

One of the reasons why Pinduoduo previously launched the refund-only policy was that there were many white-label merchants on the platform, and some of the merchants shipped products of poor quality or inconsistent with the description. The platform needed to rely on this relatively radical approach to protect the user experience.

However, unlike Pinduoduo's inventory, Taobao Tmall has more brand merchants and long-established stores, so the probability of mismatched goods or quality problems is smaller. The radical refund-only strategy is not suitable for Taobao.

A person close to Taobao told Alphabet List that Taobao has been trying to find a balance between merchants and consumers. This optimization is an adjustment to some problems discovered during the six-month trial of refunds only.

However, the collective adjustment of e-commerce platforms’ policies does not mean that refunds will disappear completely. Fake and inferior goods are difficult to completely eradicate, so platforms need to use refunds and other policies to effectively manage merchants; but while protecting consumer rights, they should not be overly partial to users, which would cause difficulties for merchants.

Refunds alone require the platform to make more balance, which is not easy, but it is a must for today's e-commerce platforms.

01

Ideally, a refund policy alone can lower the decision threshold for buyers to place orders, save logistics and labor costs caused by returns and exchanges, and improve customer experience, but its implementation is much more complicated than this.

What many people don’t know is that Amazon is the originator of refund-only. In 2017, Amazon added a refund-without-return service to its after-sales policy. The explanation it gave was, “Sellers ask for this because, in many cases, it allows you to save on return shipping and handling costs and reduce customer return dissatisfaction rate (RDR), thereby improving your rating.”

However, after the policy was introduced, sellers found that there were a large number of orders on the platform that were refunded but not returned, and some foreign buyers posted instructional videos on "How to return goods on Amazon without refund" on social platforms. There was even an international gang of thieves who took advantage of the loophole of the refund-only policy, hacked into Amazon's internal system, bribed Amazon employees to approve refunds, and stole goods worth millions of dollars. At the end of 2023, Amazon filed a lawsuit against the gang.

Domestic e-commerce platforms have introduced refund-only services for the sake of user experience, which is understandable. There are indeed a number of merchants in the market that sell goods that are not what they claim to be or are of poor quality, and the platforms should conduct more effective supervision.

However, the domestic refund-only policy has been in operation for many years, and a group of professional freeloaders have long been aware of the loopholes, which has also led to the emergence of an order-placing industry and "zero-yuan purchase" tutorials.

The relatively aggressive refund-only policy also brings unnecessary losses to merchants, and even ordinary users are educated on user habits by the refund-only policy. One user said that sometimes when chatting with a merchant, the platform will automatically pop up a refund-only window, "If you accidentally click to agree, the refund will be immediately credited to your account."

Over time, users will invisibly develop the shopping habit of applying for a refund whenever they are dissatisfied with the product.

An e-commerce seller said that his store sells large items, and often the courier has already been sent out, and the buyer applies for a refund only, which the platform directly agrees to. However, the shipping fee for large-item logistics often costs dozens of yuan, plus packaging, labor and other costs. If the logistics interception fails, the goods will be directly lost.

Merchants have begun to resist this policy. A merchant in the handmade product category recently encountered a user who only wanted a refund: he uploaded photos of other products in the early morning and applied for a refund only, saying that "the color was not what he wanted", and the platform approved the refund only request in seconds.

After the merchant who had his goods worth more than 200 yuan stolen from him failed in his appeal, he decided to call the customer himself and said, "Either pay me back the money, or I will sue you for illegally appropriating other people's property." In the end, he got the money back as he wished.

Wang Yiyun, a lawyer at Zhejiang Lunhe Law Firm, pointed out in a previous media interview that if consumers take advantage of the loophole of the "refund only" mechanism to make profits, they may be suspected of illegally occupying other people's property and will face criminal liability. "If the e-commerce platform makes a unilateral promise of 'refund only' to consumers, unless the merchant explicitly accepts it, the merchant is not bound by the platform's unilateral promise, and the losses incurred can be claimed by the platform to bear joint compensation liability."

Some businesses have also set up offline mutual aid associations with the slogan "Help you to collect goods remotely". Once a user maliciously requests a refund, the mutual aid association members will go directly to the village or community with a loudspeaker and shout, "XXX refund but not return of goods", forcing the buyer to return the goods out of face.

In fact, if the losses suffered by merchants are too great, they will save costs or increase prices in other links, and ultimately the losses will be passed on to consumers.

02

Amazon launched its refund-only policy earlier and discovered the problems with the refund-only policy earlier.

In 2018, several Amazon users received emails informing them that their accounts were closed due to high return rates. Amazon claims that it never makes these decisions lightly, but with more than 300 million customers worldwide, it will take action when appropriate to protect the experience of all customers.

In 2022, Amazon adjusted its strategy again. If buyers on the platform return 5-10 times or more per month, they will receive a warning from Amazon. The platform will evaluate each account individually and may directly close the accounts of these buyers.

However, due to different user shopping behaviors, domestic e-commerce cannot copy Amazon's strategy.

Taobao has adjusted its refund-only policy, and what has attracted the most attention from the outside world is that for merchants with an overall store experience score of ≥4.8, the platform will not actively intervene through Wangwang to support refunds only after receipt of goods, but will encourage merchants to negotiate with consumers first.

In fact, the more important adjustment this time is the adjustment to the refund-only model, that is, rejecting refund-only requests submitted by consumers with abnormal behaviors, such as abnormally high frequency of refunds-only, returning empty packages with fewer items, and high frequency of refunds for counterfeit products. At the same time, we will pay close attention to unreasonable refund behaviors and conduct manual reviews for refunds-only requests of higher amounts.

This adjustment is obviously aimed at professional freeloaders and ordinary buyers who maliciously refund. The emergence of refund only is to protect the rights of buyers, but when refund only is abused, the behavior of buyers also needs to be restrained.

On the merchant side, the model will eliminate some orders for which users have not actively requested a refund, and will not increase the service experience ceiling indefinitely, causing unnecessary losses to high-quality merchants.

In addition, the platform has also optimized the complaint channel. When a merchant initiates a complaint, the platform will conduct quality inspections on the merchant's services and ask a third-party testing agency to conduct random inspections on the products. If the inspection passes, the platform will compensate the merchant for the losses.

Taobao's refund policy has just started to adjust. According to Zizibang, this model adjustment is not limited to merchants with high experience scores. After iteration, it will be applicable to all merchants, and small and medium-sized merchants will also be able to enjoy similar services. Of course, the higher the experience score, the greater the merchant's disposal power.

03

Adjusting the refund-only policy does not mean that the refund-only policy will completely disappear from history.

Since fake and inferior goods will not completely disappear from the market, the platform needs to introduce corresponding regulatory policies to restrict merchants and help consumers protect their rights, but the refund policy alone cannot be too radical.

However, blindly favoring users will inevitably damage the platform ecosystem. "Refund only" should return to a neutral policy and become a bottom-line measure to protect the rights and interests of both buyers and sellers, helping honest consumers to restrict unscrupulous merchants, rather than aiming for refunds.

Previously, the refund policy was too biased towards users, but this round is equivalent to balancing the scales and safeguarding the legitimate rights and interests of sellers, especially small and medium-sized businesses.

Since most brand merchants have relatively sound service and operation systems, the probability of being exploited by freeloaders or malicious refund-only users is lower, and their risk tolerance is stronger. However, small and medium-sized merchants, especially those in categories with high return rates such as clothing, are forced to bear heavy pressure of refund-only and capital loss.

According to statistics from the National Retail Federation, more than 100 billion items were fraudulently returned in the United States in 2023, which is equivalent to 13.7% of the total returns received by retailers last year and more than double the return fraud in 2020.

According to calculations by an e-commerce insider, the various after-sales services such as refunds, returns and refunds vary greatly from category to category, but the overall proportion has increased this year. "It is conservatively estimated to account for 5%-15% of the cost."

The future optimization of the refund policy alone will be equivalent to reducing the burden on small and medium-sized businesses.

In addition, starting from September this year, Tmall will cancel the annual software service fee of the platform. Prior to this, merchants in different categories of Tmall had to pay an annual fee of 30,000 to 60,000 yuan, which means that small and medium-sized merchants will be able to save a lot of money every year.

In the past year, as e-commerce has entered a buyer's market, major e-commerce platforms have stood on the side of users. However, in the two-sided market of the e-commerce industry, buyers are users and merchants are also customers. The bad behaviors of both merchants and users need to be reasonably regulated.

Now, the negative impact of over-favoring buyers has become apparent, and e-commerce platforms need to find a new balance between merchants and users. Taobao's adjusted refund-only policy is obviously more suitable for the platform ecology.