Snapdeal banning discounts? Thinking of seller benefits now?

Online product returns have been driving marketplace sellers mad. Some of them have gotten vocal about product return distress. Others see product returns as a part and parcel of the ecommerce game, but are still questioning the extreme escalation of product returns!

‘No questions asked’ return policies are hurting seller reputation, their profits and their will to stay with online marketplaces.

Snapdeal’s Looking Out for its Sellers?

As of 13th May, Snapdeal will limit all online seller discounts to 70% and nothing more!

Sellers on Snapdeal will no longer be allowed by the marketplace to provide more than 70% discounts on the MRP of most products. Snapdeal believes it can control the ever increasing merchandise return rate by reducing discount rates.

So on 9th May they announced to their sellers via email,

Is the Message Finally Sinking in?

Sellers on all leading marketplaces including Snapdeal have criticized the ‘no questions asked’ return policy. It only sees to the buyers benefits and completely ignores seller problems caused by it.

• Return logistics are a nightmare. Every sellers knows the horrors of having inventory stuck in transit for long durations and the unending accounting errors faced on account of multiple product returns.
• Damaged goods are another headache that also hurt a seller’s wallet. Who’s going to compensate the damages now that the product is completely unsellable? Compensations from the marketplace do not cover the cost of picking up the returned product.
• The old switcheroo ploy has been tweaked so many times that it’s hard to say what fraudulent buyers will return next!

Snapdeal’s Logic Behind Barring Seller Discounts

A Snapdeal spokesperson also told sellers, when they offer discounts that consumers perceive as unrealistic, the consumer perceptions about the product’s quality will be affected.

The marketplace says its sellers determine product prices based on their marketplace rules and information about ongoing market activity, from numerous sources including the marketplace.

This strategy may go well with the foreign investment policy, believes chief executive, Devangshu Dutta, of the retail consultancy firm Third Eyesight.

The government wants to control deep discounts and in a way Snapdeal seems to be doing that with this policy. However, Dutta said, sellers will not like the discount limit very much because it influences their seller’s pricing. And according to the guidelines from the government, the prices of goods and services cannot be directly or indirectly influenced by marketplaces.

What do Online Sellers Think?

Some believe this could be good for the sellers at Snapdeal. Others claim it is a hindrance when they attempt to clear piled up inventory.

The association of online sellers, AIOVA says, “Snapdeal should discuss these policies with vendors before putting any cap on discounts.”

Which is a good argument, after all online sellers are being asked to rethink their game plan based on marketplace whims!