Taobao and JD e-commerce platforms have recently carried out “refund only” services, following in the footsteps of their competitor Pinduoduo, which achieved rapid growth partly due to its "refund only" policy.
On December 26, 2023, the revised “Taobao Platform Dispute Handling Rule” came into effect, including three provisions concerning this service.
While requesting after-sales services, consumers can choose either “returning merchandise for a refund” or “refund only”. For products being chosen for these two services, if they are identified with problems of inappropriate description, counterfeit, etc. after a multidimensional evaluation based on the platform’s big data capabilities, Taobao will support consumers’ requests.
Taobao will support users’ “refund only” request if sellers delay or start the delivery of commodities without buyers’ consent.
The products under the “7-day unconventional return” policy and products whose delivery are rejected by buyers are also eligible for the “refund only” service.
Similarly, JD revised its after-sales and dispute handling policies and added a “refund only” standard for users. The platform states that if the commodities sold by merchants have serious quality or other problems, it has the authority to approve consumers’ requests for “refund only” or “returning merchandise for a refund".
On the one hand, the implementation of these services is Taobao and JD’s attempts to draw more users by protecting consumers’ rights and enhancing their shopping experience. Currently, the e-commerce industry is increasingly competitive and the rapid growth of Pinduoduo poses pressure on major e-commerce platforms. On November 29, 2023, US time, Pinduoduo’s market value briefly surpassed that of Ali, reaching USD 192.1 billion compared to Ali's USD 191.8 billion. On the other hand, these services are launched to cater for the consumers’ demands. In recent years, consumers increasingly pay attention to the cost-effectiveness of products. The combination of “refund only” policy and platform’s low-price strategy is effective in attracting price-sensitive consumers.
However, this policy is possible to pose difficulties for the development of small and medium enterprises, since some consumers may maliciously employ the service to obtain products without payment. Therefore, e-commerce platforms need to consider how to balance the interests between consumers and merchants. For instance, prior to approving buyers’ “refund only” request, Taobao will evaluate merchants’ actual operation, such as quality score, number of complaints, etc. It also offers a quick appeal channel for sellers to deal with the orders within 30 days. If this balance can be achieved, the policy will be helpful to prompt merchants to provide products with better quality and more efficient services, which will ultimately be beneficial for the further development of the e-commerce industry.
