Flipkart introduces ‘part-payment’ method to cut order cancellations, returns: Report

Walmart-owned Indian e-commerce major Flipkart has devised a new method to cut returns and cancellations. The company will reportedly allow customers to make partially payment while placing their orders and opt for balance on delivery.

In an e-mail to associated sellers Flipkart said that customers who opt for ‘part-payment’ would be allowed to pay the balance amount in cash or by digital means at an unchanged rate card, Business Standard reported.

At present, most e-commerce platforms allow three transaction methods – cash on delivery (CoD), equated monthly instalments (EMIs) or payment while placing order (pre-paid).

Customers largely opt for CoD, which means companies amass higher gross merchandise value (GMV) against higher risk of cancellation. This move is expected to mitigate GMV growth and reduce cancellations, it said.

Experts have also pointed out how CoD has boosted 'fake buys', which then lead to cancellations and higher return numbers. The process increases logistics costs for e-commerce firms.

In a tweet on July 15, the All India Online Vendors Association (AIOVA) hailed Flipkart's move as a 'masterstroke', adding that it “can lead to 2-3 percent reduction in prices for consumers as currently losses of such undelivered orders were factored as a cost.”

It further said that this could be the 'first step' in making the Indian e-commerce space entirely prepaid like it is in the United States, European Union and other developed nations.