The debate over whether to keep "refund only"

As e-commerce is developing rapidly, the convenient policy of "refund only" has gradually changed and become a focus of controversy between merchants and consumers. In the face of malicious refunds and rule abuse, how can e-commerce platforms adjust their strategies, balance rights and interests, and protect the interests of merchants? This article explores the evolution of the "refund only" policy and the conflicts it has caused, as well as how platforms and merchants can respond to this challenge.

When Juzi (pseudonym) saw the pending indictment, he was furious. He was not going to tolerate this freeloading anymore.

Juzi is a Pinduoduo merchant that runs a cosmetics company. In May, a customer received the product and said that she was allergic to it 4 days after using it. She directly refunded the money without returning the product. Juzi asked the customer to pay the money online, but the customer did not reply after reading the message.

"About a week later, I sent her a text message saying I would sue her. I wanted to give her a chance and just return the money. Unexpectedly, she did not reply to my text message, but directly contacted the platform customer service to say that I wanted to sue her.

I received a call from the platform’s customer service, who of course denied that I was going to sue the client and even scolded the customer service staff. Orange started the lawsuit directly and refused to settle.

Recently, the discussion about "refund only" has been very heated on the Internet. This policy should be a powerful tool for resolving shopping disputes, but in practice, it has caused some ridiculous and bizarre cases from time to time, and its abuse has also confused some merchants.

Wang Ziqiang runs a snack shop on Taobao and is very frustrated with the refund-only function. On Xiaohongshu, Wang Ziqiang complained, "Someone came to my store to buy pickled pepper chicken feet and said they received chicken feet and asked for a refund only. I was about to refuse, but the platform made a click and the refund was successful. There was also a child who bought a lot of snacks and couldn't finish them. He didn't want to spend money and directly refunded me. I had no place to complain."

The "refund only" after-sales service was first promoted by Pinduoduo. Its proactive and fast service experience won the reputation of consumers and promoted the commercial success of the platform, which led to imitation. Since the second half of 2023, Douyin, Taobao, JD.com, and Kuaishou have followed suit, and "refund only" has become the standard option for e-commerce after-sales service.

However, over the past six months, the "refund only" service has gradually caused a lot of controversy, and many merchants have expressed dissatisfaction with it. At the same time, this service has also exacerbated the conflict between consumers and e-commerce sellers, and topics related to "refund only" have frequently appeared on the hot search list.

Affected by this, Taobao only made changes to the refund function.

Taobao recently announced that it will implement an optimized "refund only" strategy starting from August 9th. It will upgrade the abnormal behavior recognition model for refunding only for goods received and reject refund only requests with abnormal behavior.

In just a few years, the "refund only, no return" feature has gone from being generally praised by consumers at first, to many merchants complaining about being maliciously "fleeced", and now the platform is optimizing this strategy. How do consumers and merchants view it? From the perspective of the platform, how can we better balance the relationship between transaction fairness and consumer rights?

01 Strive for the "slightest" and pursue the "farthest"

On social platforms, how to ask consumers to refund only the goods and payments, and how to sue consumers have also become topics of discussion for many merchants. How to balance user experience and the protection of the legitimate rights and interests of merchants is becoming a new issue that e-commerce platforms must face.

According to the China Business Network, in early June this year, Mr. Yang received a refund message, showing that a buyer from Weihai successfully applied for a refund for a short-sleeved shirt worth 9.9 yuan. The reason for the other party's application was that "the product is not made of pure cotton." But Mr. Yang was very sure that the product name and detail page he listed never said that the short-sleeved shirt was made of pure cotton.

Mr. Yang did some calculations and found that after deducting the costs of logistics, promotion, and raw materials, he could only make a profit of about 0.5-0.7 yuan after selling a 9.9 yuan short-sleeved shirt. After the refund, he would have to sell at least a dozen orders to make up for the loss.

He tried to communicate with the buyer, but received no response. Thinking about the fact that his store on major e-commerce platforms had been refunded 700 to 800 times this year, Mr. Yang could no longer bear it. So he took his customer service colleagues, booked the nearest train, and set off on a journey of thousands of miles to seek an explanation from the buyer.

After calling and texting the other party for several hours, Mr. Yang finally met the buyer. The buyer said that she did not take advantage of the situation maliciously, but she only requested a refund because she was allergic to non-cotton clothes. She also said that although the short-sleeved shirt did not state that it was made of pure cotton, she bought it as pure cotton, and later she was too busy to reply to the customer service.

Mr. Yang did not agree with the buyer's statement and demanded a refund of 9.9 yuan for the clothes and to cover their round-trip travel expenses and accommodation expenses totaling 3,000 yuan. After a long negotiation and the intervention of the police station, the two parties finally signed a mediation agreement, and the other party agreed to pay 1,500 yuan in installments.

A few days later, Mr. Yang received a call from the platform operator, saying that his store had been complained about and someone was found offline to punish him by permanently removing the products from the shelves, which was equivalent to permanently closing the store. In response, Mr. Yang said that he did not want to get involved in endless disputes and did not try to appeal again.

In fact, Mr. Yang is not an isolated case of spending a lot of money to track down the buyer.

On July 15, the topic #1400 yuan washing machine was only refunded because it could not be installed# was on the Weibo hot search list, sparking discussions among many netizens. According to a merchant, the wall-mounted washing machine he sold worth 1400 yuan was successfully "only refunded" because the wall-mounted parts could not be installed on the wall.

In the "Investigation Action on 'Refund Only' in E-commerce Platforms" initiated by the E-commerce Research Center of the China Internet Network Information Center, it can be seen that the abuse of "refund only" has caused confusion among some merchants.

Not only low-priced items, but also some items worth hundreds of yuan were applied for "refund only". The reasons for these buyers' applications varied, some said they "didn't like it" and some simply said they "didn't have the money".

This matter has also attracted the attention of the court.

As of the end of last year, among the 23,792 cases in the online consumer field heard by the Beijing Internet Court, 679 were consumer dispute cases involving "seven-day no-reason return".

The Beijing Internet Court said that the number of cases has increased year by year and there are many reasons for this.

Such cases involve a wide range of goods and services, including clothing, electronic products, luxury goods, etc. However, there are disputes in judicial practice over whether more and more goods, such as tickets, gold, jade, jewelry, etc., can be subject to the "seven-day no-reason return" rule, which has led to an increase in the number of cases.

In addition to disputes caused by the "refund only" rule, cases arise during the "return and refund" process due to inconsistent recognition by consumers and operators on e-commerce platforms of the integrity of the received goods, as well as risks arising from the transportation of goods.

Behind the gradually changing "refund only" policy, it seems that some people are maliciously abusing the rules, but in fact, the rough outlines of the rules, the extensive management and even the simplification of the rulings have given "wool-pullers" an opportunity to take advantage. This has also brought about a "backlash" from merchants. In reality, there are many cases where merchants have taken e-commerce platforms to court.

In a "refund only" case in August this year, the court ruled that the platform did not give the merchant a reasonable time to respond and provide evidence, but directly intervened to take refund measures, infringing on the rights of merchants and consumers to equally handle after-sales issues of goods.

To this end, some e-commerce platforms and operators within the platforms have set up standard clauses to exclude the application of the "seven-day no-reason return" rule, which has also led to an increase in the number of cases.

"We have no choice, because there are too many malicious refund requests. Setting the terms is also to force users to communicate with us about refunds and reduce the frequency of malicious refunds." Wang Ziqiang said. The original intention of "refund only" was good, but in the process of implementation, it gradually changed.

02 Refund only: The imbalance of the “golden balance”

“Refund only” is a double-edged sword, but how can the platform balance the relationship between consumer rights and merchant interests?

In traditional commerce, buying and selling requires two parties to exchange money and goods. If the transaction fails, the goods are returned to the original owner. However, in the e-commerce era, "refund only" breaks the convention. During the process, the platform is deeply involved in the transaction process, combining the roles of intermediary, service provider and referee. The interests of the three parties are thus complicated, and a new consensus and order have not yet been established.

From service to conflict, when we ask how "refund only" disputes arise and clarify the boundaries of rules and implementation details to avoid abuse, efficiency and fairness are swinging at the two ends of the balance of interests of the three parties; in both the legal and commercial fields, "refund only" is a subtle disturbance.

A phenomenon worth noting is that as the phenomenon of "wool party" and "scalper party" intensifies, e-commerce platforms are accelerating the adjustment and optimization of some after-sales policies to ease the intensification of conflicts between platforms, merchants and consumers. Before Taobao's move on refund-only, Pinduoduo and Douyin had already optimized the refund-only function.

Business Data saw from the e-commerce APP that Pinduoduo marked "not received goods, or applied after negotiation with the merchant" in the refund only function, and Douyin marked "not received goods or refused to accept, or agreed with the merchant not to return goods but only refund" in the refund only function, hoping to ease the conflict between the platform and merchants.

This time, Taobao plans to launch three optimization measures for "refund only", which are more about adjusting the scale of "Themis". Buyers and sellers still rely on service and credit.

It can be seen that through this optimization, Taobao has enhanced the after-sales autonomy of merchants and reduced or cancelled after-sales intervention for high-quality stores based on the new experience points. This strategy will officially take effect on August 9.

Specifically, Taobao's upgraded refund-only identification model mainly enhances the identification of abnormal behaviors such as abnormally high frequency of refunds only, returning empty packages with few items, and high frequency of refunds for counterfeit products. At the same time, it pays close attention to unreasonable refund behaviors to protect the rights and interests of merchants.

At the same time, Taobao will introduce an "experience score" mechanism in the after-sales scenarios of merchants. For merchants with higher "experience scores", the platform will no longer take the initiative to intervene and require merchants to "only refund", but encourage merchants to negotiate with consumers first; for merchants in other segments, the platform will give different degrees of autonomy based on experience scores and industry nature. The higher the experience score, the greater the merchant's disposal rights. The relevant strategy will be officially implemented on August 9.

Recently, the "Experience Points" system has been officially launched to all Taobao and Tmall merchants, and will completely replace Taobao's previous Seller Service Rating System (DSR).

The new system includes "Store Experience Points" and "Product Experience Points (PXI)", the former is used to evaluate stores, and the latter is used to evaluate individual products. Information released by Taobao Tmall shows that the "Experience Points" will be linked to the traffic of products and stores.

03 Let the three-year “refund only” policy last a little longer

In fact, the “refund only” feature has been launched for less than three years. In 2021, Pinduoduo first launched the “refund only” feature, and many e-commerce platforms followed suit. However, different platforms have different attitudes towards “refund only”.

Many merchants told Business Data that although Taobao, JD.com and other platforms also have situations where the system forces them to agree to "refund only", the number is relatively small and there is still room for merchants to appeal. However, on Pinduoduo, not only are the number of "refund only" cases high, but it is also useless for merchants to appeal.

Mr. Zhou, who sells daily necessities, has also encountered such a situation. "In March, a customer from Putian bought three tubes of children's toothpaste from my Pinduoduo store and contacted our store saying that one of the toothpastes was a little squeezed. The picture provided was in an artificially squeezed state, and there was no way to prove that there was a problem with our product. We also have a proof of intact shipment from the warehouse, which has been submitted to the platform in the background. As soon as the customer reported the problem, we immediately contacted the customer and said that the goods could be returned or exchanged with freight insurance. As a result, the customer service specialist of the Pinduoduo platform immediately intervened and refunded the full amount of the order to the customer without my permission." In the end, this refund-only matter was also left unresolved.

However, some consumers believe that the core reason for choosing "refund only" is that the product quality is not up to standard.

Earlier this year, Li Mingxian bought a hat for more than ten yuan on Pinduoduo. After receiving it, she found that the fixed adjustment strap on the hat had become a retractable strap, which was inconsistent with the content on the promotional page. She initially contacted the customer service for a return and refund, but the customer service said that they "would not bear the shipping cost."

But a hat only costs a dozen yuan, so returning it is not cost-effective. At this time, Pinduoduo popped up a window on the chat interface to remind her that "Customer service has detected that the merchant has a conflict with you and can provide you with a full refund channel." After Ms. Qu clicked "Agree", the system immediately refunded her the money because of her good credit record.

A small and medium-sized merchant said that he was happy to see Taobao's change, but the specific effect of the "upgrade" of the platform recognition model still needed to be waited and seen. However, some merchants told Business Data that it was difficult for the store to reach 4.8 points, and even if the merchant currently had 4.8 points, once it was maliciously evaluated by customers, the score would drop immediately.

The so-called "comprehensive store experience score" is mainly related to product quality, logistics speed and service guarantee. Take the store of the merchant "Tuanzi" as an example. For example, the product quality and service guarantee of his store are both 5 points, but the logistics speed is only 4.4 points, so the current comprehensive store experience score is only 4.76 points.

Zhuang Shuai, special researcher at the E-Commerce Research Center of the China Internet Network Information Center and founder of Bailian Consulting, believes that the reason why Pinduoduo was the first to launch the "refund only" policy is due to its product background and the original intention is reasonable.

Pinduoduo started out as a retailer of agricultural and sideline products, focusing on the impression of "low price" and combining it with a faster and shorter shopping process, and quickly gained market recognition. However, at the end of the sales process, agricultural and sideline products have a short shelf life and high loss. Spoiled and bad fruits have no value for secondary sales, and returns are a waste of transportation resources.

Although the retail categories have expanded since then, the low-price feature has not changed. If the shipping cost is higher than the value of the goods, it is not cost-effective to return the goods. In order to crack down on bad merchants and inferior goods, "refund only" also has a punitive color and plays a role in forcing merchants to operate in good faith.

This is also the reason why the policy of “refund only but no return” did not cause much controversy in the early days. It did provide convenience.

Quantitative change can lead to qualitative change. In 2023, the number of express parcels nationwide reached 162.48 billion, which doubled from 2020. "Refund only" has also been expanded to more categories and platforms - efficiency has been put to the test, and robots have become the key to the platform's rapid processing of massive after-sales services.

The robot monitors the conversations between consumers and merchants, including key words and emotions, and pops up pop-ups in seconds to intervene in after-sales service. However, even though the robot customer service and algorithms are tireless and stable, they are far from perfect.

Zhuang Shuai believes that Taobao's optimization this time hopes to curb this undesirable trend through a complete system of experience points; on the other hand, it also believes that high-quality merchants can better serve consumers, allowing high-quality merchants and consumers to have a more heartwarming relationship, reducing platform intervention, and increasing interaction between merchants and consumers.

Other platforms are likely to follow suit. After all, this approach has more benefits and can promote the healthy and benign development of the platform ecosystem.

From online shopping on the web in the PC era to online shopping on apps in the smartphone era, e-commerce has developed for 26 years. The "refund only" function has only existed for three years, and it will continue to exist, but the rules will continue to be optimized and improved.

It is worth mentioning that the State Administration for Market Regulation's "Interim Provisions on Anti-Unfair Competition on the Internet" will be officially implemented from September 1. Article 24 of the "Provisions" states that platform operators shall not use service agreements, transaction rules and other means to impose unreasonable restrictions or impose unreasonable conditions on transactions, transaction prices and transactions with other operators within the platform.

Zhang Yi, CEO and chief analyst of iMedia Consulting Group, analyzed that more e-commerce platforms may follow suit and adjust the "refund only" rules, which is worth watching.

By Guo Mengyi