Interpretation of Taobao's four new policies: loosening the "refund only" policy may be a new beginning for e-commerce

Taobao’s recent four new policies herald new changes in the e-commerce sector. These policies aim to rebalance the interests of the platform, merchants and consumers, reduce malicious refunds, and reduce merchants’ operating costs to attract more merchants.

Taotian Group, which is owned by Alibaba, has been quite active recently.

The focus is undoubtedly the relaxation of the "refund only" policy. Starting from August 10, Taobao will grant all Taobao and Tmall merchants different degrees of "refund only" autonomy based on the store's comprehensive experience score. The platform will cancel or reduce active intervention, and merchants and consumers will negotiate first. A merchant who participated in the internal test revealed to the "IT Times" reporter that many abnormal orders have been directly blocked by the system.

It is not just the “refund only” that has changed. Some media reported that starting from September 1, Tmall will officially cancel the annual fee for merchants. Some industry insiders also revealed that Taobao Tmall is expected to test a new policy on freight insurance in September to give merchants more subsidies.

The new policy has not yet been implemented, but merchants are already restless. Regarding the four major focuses of the new regulations, the reporter of IT Times had a dialogue with several practitioners of Taobao and Tmall.

I. Focus 1: Taobao loosens its “refund only” policy and targets the “freeloaders”

Since 2024, "refund only" has almost become the "standard configuration" of e-commerce platforms, but controversy has also been growing.

After purchasing clothes worth 11.96 yuan online and applying for "refund only", the buyer was ordered to pay more than 800 yuan in compensation; the merchant drove thousands of miles to meet the buyer to ask for an explanation because the buyer returned 12 pairs of socks less than the buyer paid; the merchant was determined to fight the lawsuit to the end after the buyer asked for "refund only" for quality issues with a 14 yuan lamp... "For the sake of a breath of fresh air!" Most merchants told the IT Times reporter.

Chen Kang (pseudonym) is a merchant who decided to fight the lawsuit to the end because the buyer asked for "only a refund" for a 14-yuan lamp. A month later, the latest news is that the court did not accept the case, so he decided to continue trying other ways until there is new progress.

Consumer Ms. Lu bought a headboard on Taobao, but soon regretted it. The product had not yet arrived, so she applied for a "refund only" and the merchant quickly agreed and immediately intercepted the courier. In the follow-up communication, the merchant told Ms. Lu that because he had to fight wits with the "wool party", he learned to quickly intercept the logistics to reduce the loss of "refund only".

"In fact, it is not the merchants, platforms or consumers who have intensified the conflicts, but the freeloaders and black and gray industries." Lin Wei (pseudonym) is a Taobao store operator with more than ten years of experience. He understands that the original intention of the platform to launch "refund only" was to protect the consumer experience, but in actual implementation, some freeloaders took advantage of the loopholes, and many merchants were miserable.

In the process of investigating how the freeloaders exploited platform loopholes to apply for "refund only", the "IT Times" reporter found that in the eyes of these professional freeloaders, the key to the success of "refund only" lies in how to "guide" the platform's customer service to intervene with words, and the system's ability to identify the buyer's identity.

It can also be seen from Taobao's new "refund only" rule that the key to "loosening" is to reduce the frequency of the platform's active intervention, or to return the initiative to the merchants as much as possible. However, compared with the "one-size-fits-all" approach when promoting "refund only" before, the loosening is carried out in stages.

According to a reporter from IT Times, starting from August 10, the new strategy will be first tested for merchants with a comprehensive store experience score of ≥ 4.8 points. The platform will not actively intervene through Wangwang or support "refund only" after receiving the goods, but the merchants will negotiate with consumers first. Other merchants are segmented according to experience points and industry nature. The higher the experience score, the greater the right of self-discipline. In addition, according to media reports, the platform will also upgrade the "refund only" recognition model to enhance the recognition of abnormal behaviors such as abnormally high frequency of refund only, returning empty packages with fewer items, and high frequency of refunds for counterfeit problems.

"For the women's clothing industry, which has a high return rate, a score of 4.8 is not a low requirement," Zhang Man (pseudonym), who has run a Taobao online store in Shanghai for ten years, told reporters. If you randomly select a Taobao store with a comprehensive experience score of 4.6, you will see that this score has exceeded 53% of its peers.

In a merchant communication group, a merchant said that it was relatively good for her store experience score to be maintained at 4.5 points; another merchant believed that the new regulations might form a closed loop. When merchants refused to give buyers "only a refund", the other party would raise quality issues, which would in turn affect the store experience score. When the score was lower than 4.8 points, did it mean that a direct refund could be made again?

The answer is no.

Taobao confirmed to IT Times that the "refund only" upgrade policy will be available to all merchants. A merchant who has participated in the internal test also confirmed to the reporter that "the internal test is not limited to merchants with a score of 4.8 or above."

Merchants who have participated in the internal test also mentioned that the "refund only" complaint process has also changed. Previously, the process for merchants to file a complaint was very complicated. Now Taobao provides a quick complaint channel. After the merchant files a complaint, the platform will ask a third-party testing agency to conduct random inspections on the products. If there are no problems with the inspection, the platform will return the wrongly compensated losses to the merchant.

"For malicious refund-only orders, the platform should be able to identify the freeloaders through behavioral judgment, such as whether the consumer has communicated with the merchant, and whether he has been marked as a malicious refund-only user by multiple merchants." A merchant suggested this for the big model.

2. Focus 2: Experience points will be added, and high-scoring stores will receive more support

Although the new “refund only” policy has not yet been launched, internal testing has already begun.

According to feedback from internal beta merchants, the number of unreasonable "refund only" orders is much smaller, and abnormal orders will be directly intercepted by the system. Normal "refund only" behavior can be left to merchants and consumers to negotiate independently. For "refund only" orders with higher amounts, the system will not automatically approve them directly, but will enter manual review.

However, although the experience score of 4.8 points is not the watershed for "refund only", the importance of the experience score in merchant operations will become increasingly apparent.

As the leader of China's e-commerce platforms, Taobao once established a complete "evaluation system" as the basis for consumers to choose products online. However, after years of operation, this system has gradually lost its reference value due to illegal operations such as fake orders. The experience score is a seller service evaluation system rebuilt by Taobao.

It is understood that the "Experience Points" include the "Store Experience Points" and the "Product Experience Points (PXI)", which will completely replace the previous DSR (that is, Taobao's previous seller service evaluation system). The experience point system will be fully applied to store operation scenarios such as Taobao Mobile search, Guess What You Like, Alimama-related advertising, and event registration.

According to Lin Wei, Taobao and Tmall will use store experience scores and product experience scores as key indicators to judge merchants. If the experience score is high, the search ranking will be higher, the traffic will be more, and there will be greater autonomy in after-sales handling such as "refund only".

3. Focus 3: Freight insurance subsidies for merchants, don’t “feed” the wool party

In addition to "refund only", freight insurance is also a problem that causes merchants a lot of headaches.

"Many conservative merchants are afraid of high costs and dare not open freight insurance." A Taobao store owner said. This is also a concern of Liu Yang (pseudonym), who has opened a store on the Taobao platform for 6 years, and his business scope is mainly underwear and clothing. "Freight insurance allows buyers to return goods at no cost, but merchants need to bear additional costs." He told the "IT Times" reporter that since the store opened freight insurance this year, the return rate has also increased due to the existence of "wool parties", from more than 10% in previous years to more than 20%, and now more than 30%. "There are a lot of return packages every day, and three or four are returned for every ten items sold, and merchants are required to complete the review within 24 hours." He lamented that compared with the past, there are more after-sales disputes, more workload, and it is more difficult to make money.

On July 31, Li Auto product manager Song Ziwei caused heated discussion among netizens for returning a large number of electronic products without reason. The reason was that she posted a Weibo post saying that she often bought several best-selling products in a certain category, tried them for 7 days, kept the best one, and then returned the other products. Most people said that this behavior not only increased the return rate of electronic products, but also increased the probability of other consumers buying second-hand products, which in turn damaged consumer rights.

In Liu Yang's store, it is common for buyers to buy eight items at a time based on different colors and sizes, and then keep some and return the rest. "After opening the freight insurance, the platform will give merchants some traffic, but the return rate will increase as a result." He said helplessly that the increase in the return rate not only increased the freight cost, but also the inventory cost, "all the pressure is left to us."

Even in the eyes of the wool party, freight insurance is a "fat piece of meat". They take advantage of the loopholes in the rules that freight insurance does not have substantial underwriting and compensation links, and by placing orders frequently and then returning the goods, they can make a lot of money from the difference between the return courier fee and the freight insurance compensation.

"Although the details of the new policy have not yet been finalized, Taobao Tmall has already held multiple rounds of negotiations with its partners." An industry insider revealed to the IT Times reporter that Taobao Tmall is expected to trial-run the new freight insurance policy in September, thereby providing merchants with more subsidies.

However, in the view of some merchants, although platform subsidies for freight insurance are a good thing, only by cracking down on the practice of taking advantage of others at the source can merchants truly make a profit.

According to media reports, Taobao and Tmall have previously joined forces with the police and partners to crack down on gangs in high-incidence areas such as Maoming, Guangdong and Pingxiang, Jiangxi, for insurance fraud. The suspect in the Jiangxi case has been arrested and a case has been filed in Guangdong. In other words, once it is determined that an insurance accident was created through false transactions for the purpose of illegal possession, it will be convicted of insurance fraud.

IV. Focus 4: Free annual fees for merchants, lowering the entry threshold to attract merchants

"Compared to refunds and shipping insurance, the merchants around me are more concerned about annual fee exemption, which will greatly lower the entry threshold." Huang Yang (pseudonym) runs a children's clothing store on Tmall. He is located in Zhili, Huzhou, Zhejiang, a major children's clothing center in the country. According to his observation, Taobao has been seriously diverted by Douyin and Pinduoduo in recent years. Now Taobao has launched a series of policies to reduce operating costs, probably to attract more merchants. After all, merchants value whether they can do stable business most.

Previously, merchants in different categories on Tmall had to pay an annual fee of 30,000 to 60,000 yuan. New merchants who join after September 1, 2024, will no longer have to pay this fee. For merchants whose operating turnover reaches the annual target from January to August 2024, Tmall will fully refund the annual fee.

In Zhili, Huzhou, Zhejiang, most merchants are first-hand manufacturers who previously did wholesale business on 1688. In Huang Yang's opinion, the launch of Tmall's annual fee-free policy may attract more 1688 merchants to open stores on Taobao Tmall. After all, in the industrial belt, OEM factories have a strong desire to transform into brand owners.

"The operating costs of other live streaming e-commerce platforms are very high. In addition to traffic fees and commissions, you also need to pay for the cost of hiring anchors." Huang Yang found that after trying for a year or two, the merchant friends around him did not make money from live streaming, and this year they all returned to shelf e-commerce from live streaming e-commerce.

"The logic behind live streaming sales is that where there are users and traffic, there will be merchants, but traffic will eventually reach its peak, and platforms will start to compete for merchants," said Huang Yang.

5. Reporter's observation: The "equilateral triangle" of platforms, merchants, and consumers

"Refund only" is Amazon's most praised practice. In the domestic e-commerce circle, this policy was first launched by Pinduoduo in early 2021. The platform directly refunds orders below 20 yuan. When it comes to orders of higher amounts, the system usually considers multiple indicators and proactively refunds partial refunds for users with excellent credit records.

In the past year, as the e-commerce industry has changed dramatically, Taobao, JD.com, Douyin and other platforms have followed this rule. However, due to the different positioning, user profiles and merchant types of different platforms, the popularization of "refund only" has triggered a sharp backlash from a large number of merchants and a carnival for "wool parties".

Since the beginning of this year, Taobao has been looking for a new balance of interests between merchants and consumers.

At the end of 2023, Taobao launched "quick return and refund" or "refund" support, and then launched the Xinjiang free shipping plan, 88VIP unlimited free shipping for returns, upgraded the website and restarted the "Taojianghu" forum, etc., all of which focused on improving consumers' shopping experience, but in the process of implementing the new regulations, the feelings of merchants were ignored. Many merchants reported to reporters that some new regulations were not suitable for their stores and products, but under the "one-size-fits-all" system setting, they were forced to accept it and suffered a lot of losses.

The recent package of new Taobao regulations is interpreted by the industry as Taobao's "correction". From last year to this year, as the leading e-commerce company, Taobao has been looking for its own new rhythm. Although some actions seem to be deformed in practice, it is clear that Taobao's "turnaround" is much faster than before.

How to form an equilateral triangle between the platform, merchants and users will be an issue that Taotian needs to continue to address during the reform.

Author/IT Times reporter Sun Yonghui and Sun Yan Editor/Hao Junhui and Sun Yan This article is written by the operator [IT Times], WeChat public account: [IT Times], original/authorized to be published on Operation Party, and any reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.