E-commerce operation order refund logic (with flow chart)

Previously, in the article "Detailed Explanation of E-commerce After-Sales Service Types: The Behind-the-Scenes Battlefield of Brand Reputation", we introduced the participants in order after-sales (users, merchants, platforms), as well as an overview of each after-sales type (refunds, returns, exchanges), etc. Those who are interested can first take a look at the above-mentioned introductory article.

We know that when a user purchases a product, an order is generated. This is the positive process of the order. There are related articles that introduce this before - "Order System: Introduction to Order Generation and Its State Machine Flow";

However, when users initiate different types of after-sales services, the order will also produce different reverse processes. This article mainly introduces the [Refund Only] after-sales type content.

1. Nodes triggered by after-sales service

2. Waiting for delivery - refund only after-sales introduction

3. Waiting for receipt/transaction successful-only refund after-sales introduction

IV. Notes on calculating refund amount

5. How to return the refund amount

1. Nodes triggered by after-sales service

As shown in Figure 1, it can be found that the user can initiate a refund operation when the order status is pending shipment, pending receipt, or successful transaction.

(Figure 1: Different after-sales types trigger nodes)

1. Waiting for delivery

The product has not been shipped yet. If the user initiates a refund after-sales service, there is no need to return the product. The after-sales reasons are as follows (for reference only):

1) Overshoot, wrong shot, unwanted shot;

2) Refund by mutual agreement with the merchant;

3) Incorrect information such as address and contact information;

4) Not using/underusing discounts

5) Slow delivery;

2. Waiting for receipt (shipped)

In the waiting for receipt status, there are two user scenarios: the goods are still in logistics transportation and the user has received the goods but has not clicked the "Confirm Receipt" operation. At this time, the status is still waiting for receipt, and the user can initiate a refund.

Let’s take a small example: a user bought a box of apples, and after receiving the express delivery, he found that half of the apples were rotten. At this time, the user has not yet clicked the "Confirm Receipt" operation, so he negotiates with the merchant to return half of the money.

3. Transaction Success

After the user confirms receipt of the goods, he or she is allowed to initiate a refund within a certain period of time (7 days or 15 days, etc.). Please note that if the specified period of time is exceeded, the application entrance will be closed.

Let’s take a small example: a user bought a piece of clothing and clicked to confirm receipt, but found that the clothing had a lot of loose threads. However, he still liked it very much and did not want to exchange it. So I communicated with the merchant and asked them to return some money as needed to compensate me, otherwise I would give a bad review.

After the goods are received/the transaction is successfully completed, a refund will be initiated. The reasons for the after-sales service will vary depending on the status of the goods received.

The reasons for applying for goods with the received status are as follows (for reference only):

1) Don’t like it or the effect is not good;

2) Overshoot, wrong shot, unwanted shot;

3) The material or fabric does not match the product description;

4) The size does not match the product description;

5) Fading, color loss, shrinkage;

6) Defective workmanship;

7) The color, style, or pattern does not match the description;

8) The goods do not match the description;

9) Quality issues;

10) The goods received are missing, damaged or stained;

11) The merchant sent the wrong goods;

12) Counterfeit brands;

13) Empty packages;

The reasons for the application where the goods have not been received are as follows (for reference only):

1) Overshoot, wrong shot, unwanted shot;

2) Failure to deliver the goods on time as promised;

3) There is no tracking record for the courier;

4) Out of stock;

2. Waiting for delivery - refund only after-sales introduction

When the order is in the "pending shipment" status, a refund request is initiated without the user having to return the goods; the usual practice is to only cancel the entire order and not refund part of the goods.

Why don’t you support returns of some items? The reason is very simple:

When products participate in various types of (cross-store) marketing activities or use coupons, the discount amount will be allocated to the product level after the user pays. If the discount threshold is reached by placing an order, and the user immediately applies for a partial refund after using the discount, the platform will need to bear this part of the discount cost, and the effect of the discount activity may not meet expectations.

(Figure 2: Pending delivery application refund page)

After the user successfully pays and places an order, the shipping order will be pushed to the warehouse, and then a series of processes such as order making, picking, review, and packaging will be carried out before it is handed over to the logistics company to complete the shipment.

When a user initiates a refund-only after-sales service, the refund amount is usually not allowed to be modified. Next, let's see how the after-sales service operates:

1) Check whether the shipping order has been pushed to the warehouse. If not, intercept the push and enter the refund process;

2) If the shipping order has been pushed to the warehouse, the shipment will be intercepted and the outbound operation will be suspended; if the interception is successful, the refund process will begin;

3) If the interception fails and the product has been shipped, customer service may need to intervene and inform the user to apply for other after-sales types;

Summary: If the refund is successful, the order will be changed to "Transaction Closed" status; if the refund fails, the order status will be displayed on demand.

(Figure 3: After-sales process of refund for pending shipment - with warehousing system)

The flowchart in Figure 3 above assumes that the merchant has a warehousing system, but many small platforms often do not have a warehousing system. In this case, the refund process is shown in Figure 4.

When a user applies for a refund, the merchant must process it within the specified time. If it is not processed within the specified time, the system will automatically refund the money by the original route.

If the merchant rejects the user's application, the user can choose to modify the application and submit it again, or initiate arbitration with the platform.

Arbitration requires the intervention of the platform’s customer service to ultimately determine who caused the after-sales problem. If it is caused by the merchant, a refund will be given to the user, otherwise the after-sales order will be closed.

(Figure 4: After-sales process of refund for pending shipment - no warehousing system)

To expand:

If you want to support refunds for some goods, that's fine too. It certainly makes sense logically, as long as you consider various situations and weigh the benefits.

When some sub-orders (partial products) in a parent order are successfully refunded, the parent order status remains in the "pending shipment" state; when all sub-orders in a parent order are successfully refunded, the parent order status changes to "transaction closed".

3. Waiting for receipt/transaction successful-only refund after-sales introduction

After-sales service after delivery can be divided into refund only and return and refund, as shown in Figure 5. The return and refund after-sales service will be explained in the next article.

In the section "Nodes that trigger after-sales service", we mentioned that when the order is in the "pending receipt, transaction successful" status, a refund application can be initiated, which is suitable for scenarios such as wrong delivery, missing delivery, lost items, and item defects.

(Figure 5: After-sales type of waiting for receipt/successful transaction)

When a user submits a refund application, partial refund and full refund are supported. The corresponding after-sales statuses are partial refund successful and refund successful. Of course, there are also platforms that do not support partial refunds. I don’t know if there is a problem with my test. You can look at Figure 5 and Figure 6 for comparison.

(Figure 6: Pending delivery application refund page)

After delivery, only a refund will be made. Since there is no need to return the goods, the refund process is similar to the flowchart in Figure 4 and will not be introduced here.

Here is a new knowledge point: no physical return to the warehouse. Non-physical return to warehouse refers to the goods after sale that are not worth returning to the warehouse due to serious damage or high transportation costs.

For merchants or platforms, goods that are not physically returned to the warehouse are considered losses, so they need to generate a damaged goods delivery order with the document type of no physical goods to facilitate accounting processing in the finance department. This situation is more common with fresh fruits and vegetables. For example, seafood or fruit have a shelf life. If they are transported back to the warehouse, they will go bad and cannot be sold. Returning them to the warehouse will only increase costs.

IV. Notes on calculating refund amount

1) The actual amount paid for the product

If the product participates in a promotion or uses other price reduction marketing methods such as coupons, then when the product is refunded, only the actual payment amount of the product will be refunded, that is, the amount of "total amount of the product - total discount amount".

Here you may want to review how the discount amount is allocated to each product: please refer to "E-commerce System - Coupon Stacking Rules, Discount Allocation Introduction (Part 3)".

2) Virtual assets such as points and coins

If a product uses virtual assets such as points or coins to offset part of the amount, then when the product is refunded, the corresponding virtual assets must also be returned in full. For the rules, please refer to the above-mentioned coupon sharing rules.

3) Shipping cost

The article "E-commerce System - Reverse Process of Freight (Freight Refund Strategy)" introduces three freight refund methods: freight sharing method, non-refund method, and freight insurance method.

Usually, most small platforms do not have freight insurance, and adopt the approach of not refunding freight after the goods are shipped. If you encounter a difficult user, you can compensate them with a free shipping coupon or modify the refund amount to make up for the shipping costs.

4) Coupon Issues

Usually coupons are non-refundable, but if the user is persistent, they can be compensated with coupons.

Suppose a user buys one item in store A and one item in store B and uses a coupon. Later, the user applies to return the item from store A. When we handle some after-sales services, we no longer consider whether the total price of the goods meets the promotional requirements, otherwise the complexity of the system will increase exponentially.

Some people may also say, I have returned all the items, can I get a refund for the coupons? If you want to quit, just quit. It depends on the specific scenario.

5. How to return the refund amount

When a refund is confirmed, the after-sales system will generate a refund slip for the payment system. There are two refund methods: original and non-original. The original method means that the refund will be returned to the corresponding account based on the type of payment method used (example: as shown in Figure 7); non-original method means that the order cannot be returned in the original way after a certain period of time, and customer service needs to intervene to handle it.

(Figure 7: JD.com platform refund path cycle)

Well, this is the end of this article.

Author: Product Secrets

Source: Product Secrets (pmdamiji)