Flipkart has introduced a new payment system to reduce product cancellation and returns. Customers will have to make half payment at the time of purchasing a product. At the same time, the remaining payment has to be paid on the delivery of the product.
The Walmart Honored e-commerce company told Sellers that the part-payment system would encourage pro-paid transactions. Customers can give cash to the remaining amount at the time of delivery of the product, or can also do online transactions. The rate card will remain the same for ‘part payment’ orders.
pre-paid, post-paid (cash on delivery) and EMI options when purchasing a product on the high risk e-commerce website of cancellation . Customers opt for cash on delivery (COD) the most. This option has the highest risk of cancellation of the product, causing loss to companies.
Flipkart told Sellers that ‘part-payment’ would help them achieve GMV growth and reduce cancellation. The company received an investment of $ 1.2 billion from Walmart this week. The company works with over 200,000 cellars and 250,000 small vendors such as artisans, weavers and craftsmen.
Increased logistic cost
due to cancellation Experts say that the COD system is a major reason for fake purchases and has resulted in higher cancellation and returns. This has led to an increase in logistic costs for e-commerce companies.
The All India Online Vendors Association (AIOVA) of e-commerce sellers said on Twitter that they are now advocating this system. “Will other marketplaces follow this step?” It said that this is the first step towards making e-commerce completely pre-paid, as it does in the US and EU. AIOVA said, “The move may reduce prices for consumers by 2-3 percent.”