Headline: “Refund Only, No Returns” – How Can Merchants Cope? (Theme)
Recently, an e-commerce platform announced it will optimize the “refund only” policy, and lawyers urge attention to transaction fairness. (Sub-heading)
Written and photographed by / Guangzhou Daily All-Media Reporter Cheng Yilun, Interns Sun Jingfen, Hu Zongying
On July 26, a certain e-commerce platform announced it would optimize the “refund only” policy, planning to enhance merchants’ autonomy in after-sales service and reduce or eliminate after-sales interventions for quality shops. It is reported that the relevant policy will be officially implemented on August 9.
This announcement quickly sparked heated discussions among merchants and netizens. “The ‘refund only’ policy might be relatively disadvantageous for honest businesses; I support both parties being treated equally and just suggest increasing penalties for unscrupulous merchants.” “As consumers, we support the platform strictly controlling ‘refund only’ practices, but those merchants who misrepresent goods should be penalized heavily.” “The platform finally hears the merchants’ voices!”… However, some merchants expressed that the requirements in the optimized “refund only” strategy for stores may be overly stringent, worrying that it won’t effectively resolve malicious refund behavior from consumers.
In just a few years, the “refund only, no returns” feature has shifted from being widely praised by consumers to many merchants lamenting being maliciously “sheared,” leading to the current platform’s optimization of this strategy. How do consumers and merchants perceive this? From the platform’s perspective, how can it better balance the relationship between transaction fairness and consumer rights? The reporter conducted an investigation on this issue.
Controversy Over Platform Mechanism
Some Consumers Maliciously Use “Refund Only,” Merchants Suffer from Being “Sheared”
Ms. Liu operates a women’s clothing store on multiple e-commerce platforms, and since opening her store, she almost faces “refund only” requests daily, with amounts ranging from dozens to hundreds of yuan. “Even if the merchant refuses the ‘refund only’ request, it doesn’t matter. As long as the buyer selects ‘quality issue’ as the reason for the refund, or mentions quality issues during the chat with the merchant, the platform will push the ‘refund only’ link to them.”
Because of this mechanism on the e-commerce platform, some consumers have begun to apply for “refund only” for various reasons. A female customer service representative who previously worked at a snack store on a platform said she often encountered buyers who applied for “refund only” due to food spoilage caused by their own delayed pickup or improper storage. “Many times, we haven’t had a chance to explain, and the platform intervenes in advance, offering ‘refund only’ services to buyers.” She gave an example of a customer who asked, “Why is the delivery in a red bag?” Immediately the chat window showed, “The platform intervenes temporarily, offering consumers full refund and other options,” leaving the merchant with no chance to speak.
Another female shop owner stated that she frequently receives “refund only” requests from buyers claiming issues such as wrinkles, loose threads, and smells on the clothing items. “These situations are hard to avoid on clothing, but the platform won’t verify the reasonableness or truth of them, only judging the merchant as at fault.”
Moreover, the time merchants have to process “refund only” requests is often limited. Mr. Guo, who sells stationery on a platform, pointed out that if a buyer submits a “refund only” request and the merchant fails to process it within the specified timeframe, the platform will automatically refund, regardless of the buyer’s reason being reasonable or not. “Merchants have virtually no way to cope with the platform’s ‘refund only’ mechanism.” Mr. Guo noted that some merchants, in an attempt to recover their lost funds, have even used similar tactics to “pit” their competitors. There are even individuals online posting “latest refund only tutorials” and “get 50 yuan cash for zero yuan,” teaching people how to manipulate the platform’s mechanisms to reclaim payments. Mr. Guo even encountered a buyer who explicitly stated they made a living by “exploiting the platform’s mechanisms.”
From this perspective, merchants have long suffered from the woes of “refund only.” As of the time of the report, there were over 160,000 complaints regarding “refund only” on a certain complaint platform, with most of them being merchants’ dissatisfaction with this mechanism.
Optimization for “Refund Only” Strategy
Some Merchants Take a Wait-and-See Approach, Balancing Both Parties’ Rights is Worth Watching
In 2021, a certain platform was the first to introduce the “refund only” feature, followed by several other e-commerce platforms. However, the reporter found that different platforms have differing attitudes toward “refund only.”
During interviews, several merchants expressed that while most platforms also experience the system forcing agreement to “refund only,” the number is relatively low and still leaves merchants some leeway for appeals. However, on certain platforms, not only is the quantity of “refund only” high, but appeals from merchants are ineffective. For example, Ms. Liu reported that this year, she has encountered over a hundred “refund only” requests on that particular platform.
Conversely, some consumers believe that the core reason for choosing “refund only” is that the product quality is unsatisfactory. Earlier this year, Ms. Qu from the district purchased a hat for more than ten yuan on a platform, only to find that the adjustable strap of the hat had turned into an elastic strap, not matching the promotional content. She initially communicated with customer service about returning it for a refund, but the customer service stated, “We do not cover shipping fees.” Ms. Qu remarked, “The hat was only a little over ten yuan, but the return shipping fee is 8 yuan.” While she was hesitating, the platform popped up a message in the chat interface saying, “Customer service has detected a disagreement between you and the merchant and can provide a full refund option.” After Ms. Qu clicked “agree,” due to a good credit record, the system immediately refunded her payment.
Thus, it seems “refund only” is a double-edged sword. However, how can one balance the relationship between consumer rights and merchant interests? In the review comments on the optimization of the “refund only” strategy by a certain platform, the reporter noted that the platform seeks to improve by limiting the comprehensive experience score of stores, optimizing the quality inspection appeal process, and identifying abnormal consumer behavior. It was mentioned that “for merchants with a comprehensive experience score of 4.8 or above, the platform will not intervene actively or support ‘refund only’ after receiving goods, but will encourage merchants to first negotiate with consumers.” Additionally, the platform has optimized the quick appeal channels for merchants by including “quality inspections and requests for third-party checks,” and upgraded the “refund only after receipt” model for identifying abnormal behavior, thus rejecting refund requests from consumers exhibiting such behavior.
After this measure was introduced, while some merchants applauded it, others found it more challenging. A small to medium-sized merchant expressed that they welcome such changes but are still waiting to see the specific effects of the platform’s upgraded identification model. Another merchant told the reporter, “Achieving 4.8 points is already quite difficult for a store. Even if the merchant currently maintains a score of 4.8, once they receive malicious evaluations from consumers wanting ‘refund only,’ the score will drop immediately.” The so-called “comprehensive experience score of a store” is mainly related to product quality, logistics speed, and service guarantee. Taking the store “Tuanzi” as an example, while the product quality and service guarantee in her store are both rated 5 points, the logistics speed is only rated 4.4 points, hence the store’s comprehensive experience score is only 4.76 points. “Tuanzi” revealed that although she ships the products the same day, the logistics time is uncontrollable, resulting in significant score fluctuations for the store.
“Although the current policy grants quality merchants a degree of autonomy in handling issues, does this mean that if a merchant consistently fails to reach 4.8 points, they will always bear the return shipping costs?” “Tuanzi” expressed, “Refund only itself is a violation of transaction principles, and with this new regulation, will it become even more challenging for merchants to achieve a comprehensive experience score of 4.8?”
Zhang Yi, CEO and Chief Analyst of iMedia Consulting Group, also mentioned in an interview that this action by the platform may promote self-management of after-sales issues by merchants with high “comprehensive experience” scores, helping to improve customer satisfaction and repurchase willingness; but for merchants with low scores, the platform’s monitoring and intervention in their after-sales behavior might actually intensify, affecting their sales. Balancing the enhancement of monitoring for these merchants while promoting improvements in their service levels and sales, as well as properly handling user requests, will become a significant challenge for the platform after these adjustments.
Lawyers:
“Refund Only” Does Not Violate Agreement Framework, Merchants Have Low Power in Rights Protection
Following the optimization of the “refund only” strategy, debates on whether the “refund only” behavior is illegal have started to increase. Some netizens remarked that “refund only” is inherently a violation of transaction principles, and whether the strategy’s optimization will legitimize this behavior?
So, is the platform’s setting of the “refund only, no return” rule legal? To address this, the reporter interviewed two senior lawyers, Feng Yuping and Wen Xinjian, from Guangdong Jinqiao Baixin Law Firm.
Lawyer Feng stated that in fact, when merchants first join the platform, most have signed agreements that include “refund only” clauses, meaning there is no situation of “merchants being unaware.” Merchants have, in fact, consented to allow the platform to perform “refund only” operations with full knowledge.
The reporter then found that the current “After-Sales Service Rules” on a certain platform clearly states: “When a user submits a refund-only request and the merchant has shipped the goods, the merchant must respond within 36 hours. If not processed within this timeframe, the system will automatically consider the merchant as agreeing to the refund request and immediately refund the user.” Additionally, this agreement formerly states: “Before confirming receipt of the order, if a user initiates a refund request and the goods have been shipped, under several special circumstances, the platform has the right to decide whether to agree to rapid refund based on the specifics of the order.”
“This means that once a merchant agrees to join the platform and engage in trading activities, these agreements automatically come into effect, becoming the principles both parties must abide by. In the absence of violation of mandatory legal stipulations, they will be considered valid,” Lawyer Feng explained. Although Article 122 of the Civil Code stipulates that “the deceived party has the right to demand the deceiver return the improper benefits obtained by fraudulent means,” and Article 19 of the Consumer Rights Protection Law Implementation Regulations states that “consumers’ no-reason return requests must adhere to the principles of honesty and credit, and must not harm the legal rights of operators and other consumers,” in the face of an established agreement, the platform and the buyer still hold greater power.
“We rarely receive legal consultations initiated by merchants suing the platform. On one hand, most merchants are unwilling to oppose the platform due to high costs of rights protection; on the other hand, there exist agreements when merchants join the platform, making it difficult to protect their rights,” revealed Lawyer Wen.
Lawyer Feng further noted, “Rules like ‘seven-day no-reason return or exchange’ and ‘refund only’ have to some extent reflected the platform’s limitation on merchants. If merchants do not participate, the platform may also impose other limiting measures resulting in merchants having no choice but to engage with these rules for exposure, which could involve violating ‘principles of fairness’ and creating other legal issues.”
The Platform Should Uphold Transaction Fairness Principles and Adopt “Differentiated Management” for Consumers
So, within the framework of the “refund only” agreement, how should one resolve the conflicts between merchants and consumers while protecting merchants’ rights?
Lawyers Feng and Wen believe this ultimately boils down to issues of “freedom of transaction” and the “principles of fairness.” “Consumers have the freedom to buy or not buy, and merchants have the freedom to choose whether to participate in the platform’s ‘refund only’ rules.” They suggest that the platform should create more scientifically sound rules based on these two perspectives.
On one hand, the platform should grant merchants subjective and objective freedom regarding the “refund only” agreement. This means not only should merchants have the right to decide whether to sign such agreements to gain more trust and sales from consumers, but it should also ensure that even if they do not sign agreements, merchants can successfully join the platform and receive normal traffic promotion, ensuring that their regular market operations are not affected. “If merchants are adversely affected by the platform’s hidden limitations on traffic, promotions, and exposure due to not participating in the platform’s ‘refund only’ rules, the platform may potentially be obstructing market competition using its advantageous position, constituting a suspected monopolistic behavior.”
On the other hand, the platform can utilize big data to evaluate each consumer’s credit and implement respective differentiated management measures for consumers with different credit ratings, formulating alternative rules for them. For instance, shortening the application time for “refund only”; increasing the difficulty for consumers with records of malicious refund behavior to submit applications; requiring consumers who frequently apply for “refund only” to sign for or open packages in person. “The goal is to guide consumers to appropriately enjoy their rights.”
