Flipkart to Stop Offering Refund Policy on Certain Categories; Other E-Commerce Platforms Considering it too!
Flipkart, the e-commerce company based out of Bangalore is set to tighten its return policy for many popular products that are sold over its platform. The move is said to help the company and vendors on board cut operational costs; however, as a repercussion the website might also isolate many of its customers.
The subjected move which acts as a potential blow to its customers will have categories such as accessories, personal care appliances, computer and camera accessories, office equipment, and game and smart wearables, apart from big-ticket items such as mobile phones, large appliances and furniture. “Refunds are not offered. All sales are final,” as stated by the website on their return policy section of the mentioned categories.
With vendors welcoming the move, some experts said the initiative could impact traffic significantly considering that liberal refunds policy is one of the biggest reasons why ecommerce has become a rage in India, along with ordering comfort and heavy discounts.
“Flipkart’s new refund policy… can be best described as penny wise and pound foolish. This may temporarily reduce the burn rate, but will alienate customers in the long term,” said an ecommerce industry executive who tracks Flipkart, as cited on ET.
Flipkart’s take on their policy change
“Our customers can request for refunds through the self-service option on over 1,150 product categories of the 1,800 available, which constitutes about two-thirds of all the categories on Flipkart. In fact, Flipkart processes about 25,000 refunds on a daily basis, 60% of which are instant, where customers don’t have to wait to get their money back,” said a spokesperson from Flipkart, as cited on ET.
Should rivals adopt the same?
Flipkart’s contender Amazon is already pacing up by expanding its portfolio into different sectors. The global e-commerce platform continues to allow refund in many categories like mobile accessories, large appliances, video games, books, software, furniture, sports fitness-and-outdoor products, clothing, fashion accessories and handbags, according to its return policy on its website.
Flipkart on the other side is building an erratic return policy by removing some categories from it; the website’s refund page now reads:
If a defect is determined within the 10-day period following delivery, a replacement of the same model will be provided at no additional cost. Only in cases where the replacement product is not in stock or has been permanently discontinued, a refund for the entire product or part(s) of the product will be provided by the seller.
The company also has a larger window of 30 days which is open for categories – clothing footwear, eyewear and fashion accessories.
Now, the company might want to distinguish its genuine customers from non-genuine by making its refund policy strict, and the outcome will surely attract a lot of heat too.
As per an electronic seller on Flipkart, the return policy states clearly that returns will be accepted after proper validation of product in order to ensure, that items are not used and while the complete packaging and product literature is included.
“Freight cost is becoming significant and Flipkart wants to improve margins by tightening return period,” the person said.
As per some sellers on Flipkart, they have experienced a drop in number of return requests in the last two weeks after the policy changed.
As mentioned on ET, a spokesperson of All India Online Vendors’ Association (AIOVA), a group of more than 1,500 sellers on various ecommerce platforms, said the move will reduce the cost of selling on Flipkart and cut losses of sellers. “Other marketplaces should follow suit,” the person said.
After understanding the “non-genuine” customers which are swindling the return policy, companies are taking forced decision to change the policy. The reason for slump in sales is lack of flexibility which online platforms had the most, as many people still prefer online shopping because of the ease of returning an item.
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