Returns rate goes up for e-commerce majors in India

By

Maverick Martins

Published
Nov 23, 2016

 The return rate for e-commerce majors has gone up by more than 50 percent as consumers continue to offer the scrapped currency notes for their orders.
 

Online sellers on e-commerce majors such as Flipkart, Amazon and Snapdeal are feeling the pinch post-demonetisation of high value currency notes, as the refusal to accept the scrapped currency has resulted in a spike in returns, according to an Economic Times report.

“This is a further loss to us as Snapdeal and Amazon charge us shipping fees on such orders,” said a spokesperson of All India Online Vendors Association (AIOVA), which represents1,500 online sellers.

E-commerce marketplaces had stopped COD — which accounted for 55-60% of online shopping in the country — immediately after the demonetisation announcement, but subsequently started it again with new notes.

The high product return rate is a double whammy for online sellers, as sales are down by up to 70% since the demonetisation drive, the AIOVA spokesperson said.
 
Sellers said cash on delivery return rate at Amazon has increased more than 20%. Amazon India did not share any numbers, but a company spokesperson said there is some impact on sales and returns due to the recent currency change announcement. It said the marketplace continues to see sustained and long-term growth of over 100% year-to-date.
 
Sellers said these measures did not compensate the cash on delivery transaction mode. However, the Amazon spokesperson said there has been ten times growth in electronic payment at the customer doorstep.

Returns rate for the e-commerce industry had come down from around 25% to around 10-12% in last two years with companies tightening their post-delivery return norms.
 
The AIOVA spokesperson said the body has approached the government to allow the e-commerce industry to accept old notes in a transparent Aadhaar-linked manner.

“If such a system is implemented, it will become a win-win for all stakeholders,” he said.

A Snapdeal spokesperson said there was a marginal dip in COD orders and since removing the Rs 2,000 cap, demand is trending towards normal.