Thursday 9 April 2015

Ecommerce sites altering policies to avoid low returns

Avanni's increasing appetite for shopping online - 20 times a month on average - should delight electronic marketplaces such as Flipkart and Amazon. But it's shoppers like her who drive them up the wall, because Avanni, by her own admission, returns to them about 30% of what she buys. Ecommerce firms in India have begun to crackdown on what they say is a rampant abuse of their returns policy, tracking shoppers' behaviours, blacklisting entire localities or even rating individual buyers the way Uber drivers rank their passengers. 

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. Back With a Bang "Internally, e-tailers do flag customers with a history of high return rate and rank them accordingly, with an accuracy of 85% to 90%."
anakiram Ganesan CEO and co-founder of MineWhat Product returns average 6-8% for etailers in India Many customers admit to returns after single use Most cite size issues on products bought online Items that show signs of use can't be accepted: CaratLane Jabong tracks shopping history on case-to-case basis eBay has set up a team to monitors returns, ratings Data mining cos even detect localities abusing policy $20 B BY 20 $13 B NOW India's e-commerce industry to be worth PricewaterhouseCoopers pegs it at about 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. 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. 

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