E-commerce turning point! Taobao takes the lead in cracking down on unreasonable "refund only" policies

Recently, Taobao's adjustment to its "refund only" policy has attracted widespread attention in the industry. This policy change not only affects the operating costs and profits of merchants, but also affects consumers' shopping experience. This article will explore in depth the background, significance, and possible industry impact of Taobao's adjustment to its unreasonable "refund only" policy, which was the first in the e-commerce industry.

Since this year, the dispute over refunds alone has become increasingly serious.

Not only are merchants complaining, some have even gone to court with e-commerce platforms; consumers are also feeling disharmonious about only getting refunds, and when the platforms forcibly intervene to handle refunds without returns, tensions between consumers and merchants also rise.

Logically speaking, this shouldn't happen.

As the situation has evolved to the present, I have discovered through industry observations that:

• First, as the online shopping population expands, many young consumers are also participating in the refund service, which was originally intended to facilitate the after-sales service of middle-aged and elderly people. Due to changes in consumer psychology and the platform rules not taking into account the diverse consumption behaviors of young consumer groups, the original rules seem unreasonable;
• Second, refunds were originally only applicable to the fresh food category. When refunds were opened to all categories, the attributes of different categories caused loopholes in the original rules.

This is also understandable, why Taobao's first adjustment to the "refund only" policy has triggered quite intense industry discussions. Merchants and consumers have never been in an antagonistic relationship. The previous industry-wide rules have intensified industry conflicts to a certain extent and are not conducive to the sustainable development of the e-commerce industry.

A fair and reasonable business environment is the common wish of ordinary merchants and ordinary consumers. It is urgent to optimize the "refund only" policy. It is time for the e-commerce industry to say "no" to the unreasonable refund only policy!

1. The pros and cons of refund-only

From my personal shopping experience, summer is the peak season for fruits. In order to eat fresh seasonal fruits, I always choose to buy fruits from their place of origin online at this time. However, due to the influence of logistics and high temperature, it is inevitable that fruits will go bad during transportation. Generally speaking, if there are a few bad fruits in a three or five kilogram fruit, they will be picked out and thrown away. This year, due to the dispute over refund only, I decided to experience the refund only service of a certain e-commerce platform.

I did not communicate with the merchant through the platform's chat tool in advance, but directly initiated a "refund application" from the order, and selected "rotten fruit, bad fruit" as the reason for the application. Then the platform showed four options: less than half rotten, half rotten, more than half rotten, and all rotten. Different options correspond to different refund amounts, namely 30%, 50%, 80%, and 100% refund.

Of course, I chose the two bad fruits that were less than half bad. After taking photos and applying as required by the platform, the platform directly returned 30% of the amount to my payment account in about two hours.

The whole process is simple and efficient. There is no need to go back and forth with the merchant. And because the refund amount is very high, it is equivalent to buying it very cheaply.

I have to say that although the refund process and result were indeed very good, my feelings were a bit complicated. Then the merchant sent me a private message: "You refunded so much money for two bad fruits", which made me feel even more guilty.

Later, as I bought more often, I also experienced applying for a full refund after receiving all the bad fruits, as well as actively communicating with the merchant about the individual bad fruits and refunding the specific number of bad fruits. In addition, learning about the refund-only experience of my family, friends and colleagues, I have a deeper understanding and thinking about refund-only.

If the existing refund-only rule gradually makes ordinary kind-hearted consumers feel guilty, creates a gap or even hostility towards merchants, and allows freeloaders and competitors to take advantage, the good shopping ecology will easily be destroyed.

So, refunds alone, which was originally a win-win innovative service that helps consumers reduce after-sales procedures and allows merchants to save the cost of returning goods that cannot be resold, are moving away from their original intention.

The "evil" of unreasonable refund-only policies has obviously begun to damage merchants' profits. Merchants and consumers no longer have more communication and warmth, and only a naked transaction relationship remains. As well as the anger of the platform's forced intervention and disrespect for merchants, merchants will inevitably begin to reduce the quality of goods and services to make up for the excess losses caused by refund-only policies, eventually forming a vicious cycle:

The quality of goods and services deteriorated, and the refunds increased. The quality and services deteriorated further, and the refunds increased...

The original refund-only rule has obviously had obvious loopholes. The increase in unreasonable refunds has also given e-commerce practitioners and e-commerce platforms more to think about:

How can e-commerce platforms ensure that refunds alone can both protect the rights of consumers and the profits of merchants, increase the stickiness between merchants and consumers, ensure healthy competition among merchants on the platform, and allow the platform ecology to achieve a virtuous cycle and develop healthily?

I think there are two solutions:

• First, e-commerce platforms need to refine rules based on different categories and types of merchants. E-commerce platforms protecting high-quality merchants is equivalent to protecting consumers. (The logic behind this will be analyzed in detail below)
• Second, e-commerce platforms cannot simply, crudely, and mechanically intervene in the name of consumers and only refund money. They need to restore the freedom and humanity of communication between merchants and consumers.

In fact, merchants on e-commerce platforms should also maintain a warm and lasting interactive relationship with consumers, just like offline physical stores and small vendors. At the same time, let the competition in the e-commerce industry return to a fair and reasonable business environment.

In the face of the unreasonable refund-only policy, Taobao has established a more complete experience score system. In the process of continuous optimization and upgrading, the experience score has gradually become an important basis for consumers to select high-quality merchants when shopping on Taobao and Tmall. On July 26, Taobao announced that it will optimize the "refund-only" strategy based on the new experience score, enhance the after-sales autonomy of merchants, and reduce or cancel after-sales intervention for high-quality stores. The relevant strategy will be officially implemented on August 9.

According to the "Zhuang Shuai Retail E-commerce Channel", after the strategy is launched, the platform will not actively intervene through Wangwang and only support refunds after receiving the goods for the first batch of merchants with a comprehensive store experience score of ≥4.8 points, but will encourage merchants to negotiate with consumers first. For merchants in other segments, the platform will give different degrees of autonomy based on experience points and industry nature.

Simply put, this strategy will benefit all merchants. The higher the experience score, the greater the merchant's disposal power.

While giving merchants more autonomy, Taobao will also provide multiple after-sales service plans for merchants to choose from, guiding them to continuously optimize after-sales services and reduce disputes and financial losses caused by "refund only".

In addition, Taobao has also optimized the refund appeal process. After the merchant files an appeal, the platform will 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 loss.

To put it bluntly, Taobao will no longer treat all merchants in a simple and rough manner with a "one-size-fits-all" approach. Instead, it will allow high-quality merchants with higher experience scores to return to a warm relationship with consumers. Especially in after-sales services that only involve refunds, for high-quality merchants, Taobao will no longer intervene in a strong manner as a platform on behalf of the merchants.

Taobao has continuously upgraded the new experience point system in the actual operation of the platform and merchants, preventing freeloaders and malicious competitors from harming high-quality merchants.

At the same time, a business development ecosystem of healthy competition with "survival of the fittest" has gradually been formed, which also helps ordinary consumers better identify high-quality goods before shopping and better avoid frequent returns.

This is Taobao's progress.

From the bottom of their hearts, consumers shop online to buy good products with high cost performance, not to get a refund and buy again after buying bad products. This not only wastes time and energy, but also takes away the fun of online shopping.

Taobao’s original slogan was also its original intention: “Shop what you like.” Now it is: “It’s so fun to shop.” In fact, they all hope that consumers can experience the fun of shopping within the rules and regulations of the platform.

Furthermore, in my personal opinion, the platform protecting high-quality merchants is truly considering the interests of consumers.

High-quality merchants have always been willing to invest in product quality and high-quality services. They will also establish good, long-term and stable consumer relationships to gain more and more loyal customers, thereby achieving certain and stable growth.

An e-commerce platform can form a virtuous circle only when it has more high-quality merchants: the more high-quality merchants there are, the more satisfied and loyal consumers there are; the more high-quality consumers there are, the more high-quality merchants there are on the e-commerce platform. In addition, healthy competition among high-quality merchants also allows them to promote and upgrade each other.

E-commerce platforms must be clear about their positioning: the platforms are only makers of rules and regulations, not powerful parents.

Taobao dares to say no to unreasonable refund-only policies. It is also able to establish and continuously upgrade the experience point system, combining refund-only policies with multiple merchant assessment indicators such as pre-sales merchant screening, online customer service, and logistics distribution to form a complete and overall merchant evaluation system. Taobao, as a platform, retreats behind the scenes and hands the initiative back to high-quality merchants.

This is Taobao’s refund.

In addition to Taobao's "no" to unreasonable refunds, I believe that other major e-commerce platforms will soon take action to formulate merchant evaluation and assessment systems that meet the characteristics of their own platforms, jointly protect high-quality merchants and consumers, and jointly build a platform ecology of healthy competition. This will push the e-commerce industry into a new stage and win new development.

2. Two major development trends of the future e-commerce industry

The future development trend of the e-commerce industry has become increasingly clear:

Trend 1: Differentiation will become the key to the continued development of major e-commerce platforms.

From the business model: self-operated, open platform, or both;

From the advantageous categories: Taobao Tmall’s clothing and beauty, JD.com’s 3C home appliances, Pinduoduo’s agricultural products;

From the platform rules: For shelf e-commerce platforms, content e-commerce platforms, community e-commerce platforms, and social e-commerce platforms, different types of e-commerce platforms should design and optimize platform rules based on multiple dimensions such as platform characteristics, platform development stage, user mentality and behavior, and merchant operating conditions.

Trend 2: The platform's rules and systems must achieve a win-win situation for consumers, merchants and the platform, and form healthy competition. Only such an e-commerce platform will become the first choice for consumers and merchants.

At the same time, major e-commerce platforms should invest more and work harder to create a more fair and reasonable business environment, which is very important for the development of the e-commerce industry:

• First, it attracts more and more high-quality merchants to participate in the e-commerce platform, so that consumers can buy more high-cost-effective, high-quality, and uniquely designed products;
• Second, retain these high-quality businesses and allow them to compete in a healthy way, accelerate business and industry upgrades, enhance industry competitiveness, and promote employment;
• Third, it will allow the entire international community to recognize China's e-commerce industry, obtain more policy support and resource support, continue to attract more outstanding talents into the e-commerce industry, and continue to produce more innovative models and technological applications.

Finally, what I want to say is that the competition in the e-commerce industry is not about who can jump higher or who has a higher market value in the short term, but about who has a better business environment and a better ecology. Only in this way can one survive well and live longer.

I hope that Alibaba, which has been in existence for 102 years, is able to implement this business philosophy, and other e-commerce platforms should also take action quickly!