While retailers globally allow buyers to return goods within a specified period, online marketplaces in the country are facing an unprecedented rate of wares being sent back, causing them logistical nightmares and potentially larger losses than factored in for product returns.
Online shoppers in India retuned goods worth an estimated $800 million to $1 billion in the fiscal year ended March 31, according to various estimates, and the problem is threatening to become more acute with rapid industry growth.
Amazon, Jabong and Snapdeal have started keeping a watch on their buyers’ behaviors. Flipkart has developed an internal rating for its shoppers.
“We have designed systems and processes that immediately detect patterns that predict misuse (of returns policy) before it happens,“ said a spokesperson for Amazon India, which offers a `no-questions-asked’ returns policy in categories such as fashion jewellery. “Some customers might want to misuse this privilege and we take that very seriously. Our systems keenly look out for indicators of misuse.“
Electronic retailers embraced the policy of product returns mainly to convince shoppers to buy gadgets and clothes online without having to worry about being stranded with a defective product or a poor fit.
On average, product returns average 6-8% for most online retailers in India, but for some this climbs to as high as 25%, according to industry estimates. Each time a buyer returns a product, the ecommerce firm has to bear an additional cost of Rs 50 to send it back to the vendor. Online retailers say many times, the products are returned after use. Jabong and Flipkart now check if a product has been used before accepting it back. Snapdeal has prescribed legal action against buyers trying to game the system. The firms declined to disclose specific numbers on product returns.
Avanni, who declined to be identified by her last name, admitted she has returned products to various retailers.
“I wasn’t aware of any such rating of buyers. I won’t be comfortable as a shopper if an e-commerce site tracks my history,“ she said. “If they publish rating disclosing what kind of shopper you are, that would be downright nasty!“ With 8 million shipments a month, Flipkart claims to have return rates in the low-single digits. “We do rate buyers to an extent. It plays a role when there are issues around orders,“ said a spokeswoman for the company.
Snapdeal checks products being sent back to determine the legitimacy of the return claim. Online jewelers CaratLane and BlueStone also inspect products being returned. “Earlier the buyer ratings were public on eBay but currently we keep them for internal monitoring,“ said Latif Nathani, vice president and managing director, eBay India Pvt Ltd.
(With inputs from Vishal Dutta in Ahmeda bad, and Aditi Shrivastava and Evelyn Fok in Bangalore)