Understanding Penalty

Points
Edited on: 23 January 2019

Private & Confidential

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What is seller penalty points system?
It’s a point-based system designed to help you achieve operational excellence by tracking your performance and
highlighting key areas for improvement. We designed this system to help you grow your business by ensuring
customer loyalty through operational excellence. You will maintain all your seller privileges as long as you take steps
to improve and stay on target.

Access to full range of seller privileges

Reward good performing sellers by giving them access to our full range of seller
privileges, while limiting privileges to sellers who require more time to improve.

Preferred Seller program.

Provide good performing sellers with priority consideration into our Preferred Seller
program.

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The tiering of the penalty points
Every Monday, we will evaluate and update sellers on how well they've performed in the previous week on the
following key metrics. Points are issued if sellers fails to meet their performance targets

Penalty Points 3 6 9 12 15

Seller privileges may be temporarily withdrawn for Penalty Tier Tier 1 Tier 2 Tier 3 Tier 4 Tier 5
sellers that accumulate a high number of Penalty
Ban from marketing
Points. The more points accumulated, the fewer campaigns • • • • •
privileges the seller will enjoy. (for 28 days)

Remove free shipping or

We will reinstate your seller privileges after 28 days as shipping rebates • • • •
long as you take steps to improve and stay on target. (for 28 days)

However, any points accumulated will remain on record

until the quarter ends. Points will reset to 0 at the start Deboost listings - moderate
• • • •
(for 28 days)
of each quarter (1st Monday of Jan, Apr, Jul, Oct) to
give all sellers a fresh start..
Deboost listings - severe
• • •
(for 28 days)

Block listing creation and

edit • •
(for 28 days)

Freeze account
•
(for 28 days)

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Calculation of the Penalty Points (Example 1)

Seller A

Penalty Seller regains

3 Points privilege

Week 3 4 5 6 7

• Seller A is issued 3 Penalty Points in week 3

• Seller is banned from marketing campaigns for 28 days
• Seller regains privilege on week 7

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Calculation of the Penalty Points (Example 2)
Seller B

Penalty Penalty Seller regains

3 Points 6 Points privilege

Week 3 4 5 6 7 8 9
Banned from marketing
campaign for 28 days
Banned from marketing
campaign, will not receive
shipping subsidies and listings
will be deboost (moderate) for 28
days

• Seller B is issued 3 Penalty Points in week 3

• Seller is banned from marketing campaigns for 28 days
• Seller does not improve and accumulates 6 Penalty Points by week 5
• Seller is not allowed to participate in marketing campaigns, will not receive shipping subsidies, and listings will be
deboost (moderate) for 28 days
• Seller regains privileges on week 9

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 Shopee focuses on 2 key fulfilment metrics

Shopee Fulfillment Metrics Targets

Non-fulfilment rate
Performance Number of Points
Threshold
The order Non-Fulfilment Rate will reflect the percentage of total Metric NFR orders Issued
orders that were cancelled by sellers and returned in the past 30days. <30 1 point
Non-Fulfillment
10%
Rate (NFR)
Non-fulfilment rate = Cancellation rate + Return-refund rate 30 or more 2 points

Late Shipment Rate

Shipped on-time orders Shipped late orders Performance Number of Points
Threshold
Metric LSR orders Issued

<50 1 point
Late Shipment
15%
Rate (LSR)
Time 1:
50 or more 2 points
Orders shipped within 2 days Time 2: Orders shipped after 2
Order creation are counted on-time 2 days days are counted late

Late shipment rate = Late shipped orders / Total shipped orders

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Non-Fulfillment Rate

7 days.

Main causes of high non-fulfilment rate?

There are two kind of situations happened in high non-fulfilment rate, high cancellations and high returns.

1. High cancellations:
- Product is out of stock
- System cancellation of orders due to inactivity for 7 days
- System cancellation of orders due to failure to ship within Days to Ship period.

2. High returns:
- Item not received
- Wrong item
- Damaged items
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Late Shipment Rate

7 days.

2 days.

Main causes of high late shipment rate?

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Calculation for Late Shipment Rate (Example 1)

7 days

When computing this metric, all orders will be included except auto-cancellation orders (already included in the
Non-Fulfilment Rate calculation) .

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 Calculation for Late Shipment Rate (Example 2)

7 days

Since seller A has normal order volume, thus his Late Shipment Rate target is 15%. Because his Late Shipment
exceeded the 15% target (16%), he will receive 1 penalty point due to high Late Shipment Rate.

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Listing Violation

How penalty points for Listing Violation is received?

Sellers will receive penalty points for Listing Violation if seller breach any of the items listed in the table shown as
above. The more listing violation a seller flagged, the more penalty points the seller will incur. Sellers who breach
Shopee’s terms and policies will be notified accordingly to edit the listings and remove all the elements which
violates the aforementioned policy.

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Top reasons flagged for Listing Violation

Duplicate Listings Brand/ keyword Spam Attribute Spam Misleading Discount

You may refer to these pages for more https://shopee.com.my/events3

https://shopee.com.my/events3/code/ https://shopee.com.my/events3/code/
info: /code/2779616051/?smtt=3.10
2600045937/ 2659227738/
https://shopee.com.my/web/events3/cod 053588
e/2459038824/

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Customer Service Violation

Rude/ Abusive Chat

Sellers reported by other users for having abusive behaviour on chats
may receive penalty points.

Request buyer to cancel

Sellers who are detected by Shopee’s system to be asking buyers
to initiate cancellation will receive penalty points.

Chats from orders canceled by buyers are manually reviewed weekly. If they are caught asking the buyer to
cancel the order due to the seller’s own issue, they will receive 2 penalty points under Customer Service
violation that week.

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Ways to obtain good operations performance to reduce penalty
points.

1. Avoid out of stock situations

Track your inventory and stock levels carefully. Update your inventory
in the Mobile App or Desktop regularly (at least once a week). Do not
overstate your stock and allocate physical stock to Shopee.

2. Ship your orders on time

Monitor your email and app notifications regularly for new order
alerts as our order system will automatically cancel your orders if
you fail to ship within 2 days after your Days to ship.

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Ways to obtain good operations performance to reduce penalty
points.

3. Turn on vacation mode when you’re away

Activate vacation mode if you’re away and will not be able to fulfill your
orders during this period of time. Do take note that you must continue
to fulfill existing orders that were already made prior to turning on
Vacation Mode.

4. Pack the right products

Download the picklist and pack list in Seller Centre to help you
check that you’ve the right items packed.

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Ways to obtain good operations performance to reduce penalty
points.

5. Quality check when packing

Make sure that all orders are packed properly. Fragile products should
be labelled and packed with extra cushioning materials such as bubble
wrap.

6. Provide accurate descriptions

Provide accurate, detailed descriptions of your product to help
buyers form a more realistic expectation of the product. You may
include information such as the dimensions, colour, accessories
included, warranty period etc.

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Where to check your penalty points?

Seller Centre > Shop Settings > Seller Penalty Points

You can view your penalty details under

“Seller Penalty Points”.

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What to do if you receive penalty points?

If is seller’s fault
Find solution to fix the issues.

OR

Appeal for the case

Seller will need to send an appeal email to our customer service.
Provide sufficient proofs (manifest, conversation etc) while you’re
compiling your email.

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Join #ShopeeUni Malaysia!

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 Thank You

Learn more about best practices for selling on Shopee via Seller
Education Hub:

https://seller.shopee.com.my/edu/

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