Retailing Section I – Flipkart Case Memo

Q1. What are the various reasons which customers give for returning product?

Customers give various reasons both ethically and unethically to return products and some of
them have been mentioned below:
 Bought the item by mistake or no longer need the item
 Received wrong item
 Received a defective or broken item
 The product doesn’t look like the images shown on the platform
 Product is of poor quality.
 Product size is too small or too large.
 Received a duplicate product
 Found a better deal or price on some other platform
 Delivery of the product was too late
 The product did not match the description of the e-commerce platform
 The product was a gift, and the person didn’t like it
 The packaging of the product was damaged
 The price tags were missing on the product
 Product doesn’t look good on me.

Q2. How does a return policy affect consumers’ buying choices? What are the different
types of return policy leniency that businesses may offer?

Convenient returns are an important part of a successful e-commerce retail business. With the
fierce competition in the market today customers can get diverted by the tiniest to
convenience, in this scenario hassle-free returns can greatly impact the customers’ buying
choices. The purchase decision of a consumer is highly affected by his/her expectations from
the after-purchase services of the platform and returns are an important part of it. Retailers
can build good return policies to develop trustworthiness and conviction for the quality of the
product amongst customers. When a customer is assured that s/he can return the product if
they don’t find it up to the mark, it gives them an incentive to order a product without any
second thoughts and thus will lead to a bigger basket size. Return policies can act as
guarantee of the product by the seller to the customers which makes the customer feel valued
and will bring them back to the same platform. An actively engaged online retail customer is
aware about the policies of all the platforms and hence a better return policy of a particular
retailer will attract him, and the retailer will gain a competitive advantage.

Types of lenient return policy:

 Time based – Retailers mention a stipulated time limit to their return policy such as
30 days or 90 days before which the consumer can claim his/her return. The longer
this deadline the more lenient is the return policy.

 Investigation based – Some return policies make it necessary for the customer to
clearly describe the problem with the product, click pictures if required and get the
 customer care on call with the customer to make sure that it is a valid return. On the
other hand, lenient policies do not ask any questions to the consumers and just process
the pick-up. Customers can take wrong advantage of this leniency.

 Monetary based – Retailers might decide to charge a ‘returns fee’ to the customer
whenever a return is made but a more lenient form would not ask the customer for any
handling charges and will completely refund the money without any questions asked.

 Approval leniency - After receiving the returned product the retailers can take few
days to approve the refund after the product is fully investigated while a lenient policy
refunds the money without any thorough investigation.

Q3. What measures can Flipkart take to reduce the high number of returns?

Flipkart can take the following measures to reduce the high number of returns:

 Flipkart should focus on writing a well detailed description of the product which
accurately mentions each and everything about the product and its use, so that the
customer gets a crystal-clear picture of its value and utility and hence can make a
well-informed decision before purchasing it.

 A lot of times customers return the product because it fails to meet the expectations
which were set through the pictures of the product. Hence, Flipkart should focus on
improving the product imagery on its platform.

 For the categories which are size based, Flipkart should focus on updating an accurate
sizing chart so that the customers don’t have to return the product due to sizing issues.
There shouldn’t be any discrepancies in the size. Flipkart can also ask the consumer to
enter his/her size details on the platform and then recommend the correct size for a
product by tallying the data.

 Include a demo video wherever required so that customer can make a decision if
they’ll be able to us the product with ease or if the complexity is high for them.

 Implement virtual trial rooms for customer to get an idea about how will the product
look on him/her and whether they’d like to purchase it.

 Focus on giving the top-notch packaging to the customers so that the products do not
get damaged and then returned by the customer.

 Flipkart can incentivize the sellers by giving a commission discount if they make sure
to properly dispatch the correct items to the customer. Selling the wrong item would
make the seller responsible
Q4. How should Flipkart deal with its sellers in short and long term in order to retain
them?

Flipkart can take the following steps to retain its sellers and keep it a fair game when it comes
to the returns

 In the short run, Flipkart can conduct training programs for the sellers to help them in
understanding the changes and help them with ways in increasing their profitability.

 Reduce the deadline to return the items for the customers so that they the number of
fraud returns can be reduced.

 Set up logistical system in place where the customers are asked for proper reason of
returning the product and are asked to click pictures and upload within 2-3 days of
receiving the parcel so that it is fair play for the sellers.

 Ask the sellers to give the proof of sending an authentic product in the first place so
that the fraud of customer replacing and returning a duplicate product can be
mitigated.

 Help the sellers with the resources required to upload good quality product pictures
and detailed description of the product.

 Conduct training programs to help the sellers in setting up optimal retail prices and
carefully analyse the reviews shared by the customers.