“Refund only” becomes the standard, who is in favor and who is against?

With the rapid development of the e-commerce industry, after-sales service has become an important criterion for measuring the quality of platforms. Pinduoduo's pioneering "refund only in special circumstances" policy has created a win-win situation for consumers and merchants, effectively combating counterfeit and shoddy goods and improving the shopping experience. This article explains in detail the implementation of this policy and its far-reaching impact, showing the innovation and efforts of e-commerce platforms in protecting consumer rights.

In the past two days, #Whose cheese was moved by the refund# has become a hot topic on Weibo, triggering 130 million views and 18,000 discussions.

The emergence of "refund only" is essentially to reduce disputes and conflicts between merchants and users on issues related to quality and returns, and it is also a protection of user rights.

It has now become a standard feature for e-commerce platforms to deal with certain special situations.

In 2017, Amazon in the United States added a returnless refund service to its after-sales policy; in 2021, Pinduoduo launched a "refund only in special circumstances" mechanism in China; in 2023, Douyin, Taobao and JD followed suit; in 2024, Kuaishou also joined the refund-only camp.

Sorting out the rules of e-commerce platforms, "refunds only in special circumstances" means that if consumers buy "seriously inferior or mismatched" goods on the platform, or encounter situations where sellers delay delivery or force delivery without the buyer's permission, the platform will support consumers in quickly returning and refunding goods or only refunding goods without returning goods after comprehensive evaluation based on multiple indicators.

It can be said that this system protects the interests of consumers to a great extent and also verifies the simplest and most basic market rule of "consumer-oriented".

From another perspective, in the current e-commerce environment of consumption upgrading, refunds only in special circumstances are also a powerful tool to promote consumption.

By improving user experience and encouraging users to place second orders, the platform's order volume can be greatly increased, thereby increasing merchants' profits and offsetting merchants' after-sales costs, forming a positive cycle.

1. Let e-commerce return to serving consumers

Product quality issues have always been one of the biggest pain points in the e-commerce industry.

When counterfeit goods were at their most rampant, even the State Administration for Industry and Commerce conducted random inspections and found that the rate of genuine goods purchased online was only 58.7%. Even the People's Daily published an article titled "Don't let 'Double Eleven' become a carnival day for counterfeit goods", publicly exposing the issue of counterfeit goods and rights protection.

In order to "fight counterfeiting", major e-commerce companies have invested countless manpower and material resources.

Nowadays, in the era of refund-only policies, if merchants have the guts to commit fraud, they will have to bear the possibility of only refunding the money.

What counterfeit sellers and unscrupulous merchants fear most is a pop-up dialog box with a message reminding them that “customer service is involved.”

Mr. Zhang from Shandong spent 459 yuan on a router from Pinduoduo, which was 40 yuan cheaper than the direct-sale store. It was supposed to be a happy "weed-pulling consumption", but he didn't expect that the router had problems the next day and could not connect to the Internet.

At first, Mr. Zhang thought it was just an accidental defect in the yield rate. He applied for after-sales service, but the merchant only agreed to exchange the product on the grounds of national warranty. As a result, the router he returned still had the problem.

"It's broken. I didn't buy a fake or branded product, did I?" Mr. Zhang was startled and immediately contacted the merchant to request a return.

As a result, the merchant directly rejected Mr. Zhang’s request for return, on the grounds that “the brand’s after-sales service failed.”

Just as Mr. Zhang was taking photos to preserve evidence and preparing to argue with the merchant, Pinduoduo customer service directly intervened in the dialog box and a message popped up asking Mr. Zhang whether he needed a return and refund.

After a simple click, Pinduoduo customer service acknowledged that Mr. Zhang met the return and refund rules, and the entire return and refund process was completed in just a few minutes.

Faced with such a smooth return experience, Mr. Zhang said with emotion: "It is very troublesome to return online shopping now. Although there is freight insurance, it is not omnipotent. The door-to-door express delivery designated by the system of many e-commerce platforms generally costs more than the amount of compensation provided by the system. The freight for an item worth 30 or 50 yuan sometimes costs nearly 10 yuan."

"So even if I buy something that's not suitable, I'll just grit my teeth and make do with it when I think about having to pay for the return myself," Mr. Zhang said self-deprecatingly. "Under the repeated PUA of e-commerce platforms, I passively completed user education and became a 'good buyer' who never returns goods."

This bizarre after-sales problem of "losing money" has finally ensured the rights and interests of consumers with the popularization of the refund-only rule.

Even during the 618 e-commerce promotion event that just concluded, the topic #有被拼多多客服客服到# became a hot topic on Weibo, sparking heated discussions among netizens.

For the platform, instead of spending a lot of manpower, it is better to let a large number of consumers fight against counterfeiting.

For consumers, the refund-only system under special circumstances facilitates consumers' after-sales rights protection and greatly improves consumers' service experience, allowing them to shop with confidence and boldness.

Accurate, simple and efficient after-sales service can also lead to repeat purchases and consumption upgrades among consumers, which in turn feeds back to merchants across the site, forming a positive cycle.

2. Refunding only is also a “guarantee”

For unscrupulous merchants, refunding only is a "magic mirror" as they are afraid that their "shady" ways of making money will be exposed.

But for stores that do business normally and have passed the platform rules, refunds alone are the "safeguard" to protect transactions.

Mr. Cui, a vegetable wholesaler from Urumqi, Xinjiang, believes that after-sales service is an extremely difficult problem for him.

As Xinjiang is far away from the "free shipping zone", the logistics cost is extremely high. Not only can it not enjoy the free shipping service, but it is also difficult for non-standard products such as vegetables, fruits and melons to apply for e-commerce after-sales services such as "seven-day unconditional return" and "freight insurance": "In e-commerce transactions of fresh food and fruits, because the goods have a short shelf life and it is difficult to return them through cold chain logistics, it is unlikely to achieve returns and exchanges."

However, without the seven-day no-questions-asked guarantee and freight insurance, consumers have no after-sales guarantee and dare not place an order at all. They would rather choose offline fruit stores that are several times more expensive.

In the field of fresh fruits, e-commerce platforms need to step in to protect and balance the interests of buyers and sellers.

Pinduoduo proposed a system that only allows refunds under special circumstances, thus playing the role of a "safety net" and allowing consumers to boldly place their first order. Through repeated transactions, they build up trust in Pinduoduo merchants and form a consumer mentality for online shopping of fresh fruits.

Refund-only is equivalent to weaving a net to cover after-sales service. Under its protection, consumers can boldly try the products provided by small and medium-sized businesses. At the same time, refund-only can protect consumers' rights and interests and encourage businesses to improve product quality and service levels.

Pinduoduo, which has implemented a policy of refunding only under special circumstances for three years, has produced far more positive impacts than negative ones. The most typical manifestation of this is the increasing number of stores that have signed up.

On May 20, 2023, Pinduoduo Group Co-CEO Zhao Jiazhen revealed that Pinduoduo has 13 million active merchants. The merchant structure is rich, and large brands, big-name dealers, small and medium-sized brand manufacturers, and white-label manufacturers are all growing continuously.

There are more and more good stores and fewer and fewer unscrupulous businesses, so naturally there will be more and more consumers.

According to Pinduoduo's latest financial report data, the number of Pinduoduo's annual active users has exceeded 910 million.

Encouraging merchants to improve themselves and to improve service quality is the greatest significance of only refunding in special circumstances.

3. Excellent stores are not affected by rules

There are good and bad businesses, and the same is true for consumers.

The policy of only refunding in special circumstances has also attracted a large number of "professional freeloaders" who maliciously apply for only refunds using outrageous reasons such as "the express packaging is damaged" and "the purchased food is not delicious".

In order to prevent "professional wool-gathering parties" from disrupting the order of the platform, Pinduoduo also has its own set of evaluation standards.

When a refund request occurs, Pinduoduo's customer service will intervene in the chat dialog box as soon as possible.

Pinduoduo customer service will first determine whether the buyer is a "normal consumer" and whether his consumption behavior is normal. If the buyer's refund record is higher than the average level, the probability of a successful refund will be low.

In addition to reviewing buyers, Pinduoduo also reviews sellers.

Pinduoduo makes judgments based on comprehensive indicators such as sales, ratings, refund rates, etc. of the stores it operates. For high-quality merchants, product quality, delivery capabilities, pre-sales and after-sales service capabilities have all been tested by the market and are almost unaffected by policy changes.

In addition, Pinduoduo platform also provides merchants with a complaint channel. When merchants encounter situations such as malicious orders and refunds, they can also complain through the platform or take legal action to protect their rights and interests.

Since 1999, the "first year of e-commerce", China's e-commerce industry has entered its 25th year.

According to the "Blue Book on Internet Facilitating the Development of Digital Consumption" released by the China Internet Network Information Center, the current scale of online shopping users in my country has exceeded 900 million.

In such a huge consumption scale, the competition among e-commerce platforms is gradually escalating. From pre-sales to after-sales, the consumer experience and consumption environment will only become more and more competitive.

In overseas markets, Costco has expanded its "return policy" to the sky, even bed sheets that have been used for five years, sofas that have been slept on for two and a half years, and underwear that have been worn... can be fully refunded.

This is not unreasonable, on the contrary, "too good" service policies will invisibly amplify consumer power. When the merchant's after-sales service is very perfect, consumers will have no worries when buying.

A loose and generous return policy can encourage consumers to spend and inspire loyalty to the platform. On the contrary, if a policy increases the cost or inconvenience of customer returns, it will harm the interests of the platform itself.

Pinduoduo’s policy of only refunding in special circumstances may just be the beginning. I believe that more services that benefit consumers will appear in the future.

Author: Chen Yan; Editor: Dafeng