In recent years, there has been a frequent occurrence in China where some consumers take advantage of the “seven-day no reason return” policy on e-commerce platforms to exploit businesses, causing great distress to merchants. With the “Double Eleven” online sales promotion period approaching, in order to prevent “wearing and returning for free”, merchants are resorting to hanging “giant tags” and “password locks” on clothes, sparking renewed attention and trending on social media platforms.
Public data shows that the return rate for women’s clothing on e-commerce platforms is as high as 50% to 60%, while the return rate for live streaming sales exceeds 80%. Many of these returns are not due to quality issues, but rather customers wearing the clothes for a few days and then unreasonably returning them, engaging in what is colloquially known as “exploiting loopholes”.
Some merchants have admitted that they have resorted to these tactics in response to the increasingly outrageous return rates, aiming to deter malicious return behaviors through physical limitations.
A clothing merchant in Beijing posted on social media, expressing that in order to prevent some customers from taking advantage of the platform policy by wearing clothes for a brief period and returning them, they have chosen to hang a conspicuous password lock on the zipper of the garment.
“Wearing clothes with a lock hanging on them when going out, most people should feel embarrassed.” The merchant told Daxiang News, adding that the password lock does not interfere with trying on the clothes. After the customer confirms receipt of the item, they are informed of the password, and the lock is then sent directly to the customer.
According to the merchant, clothes returned by customers last year after being worn caused them a loss of several thousand yuan, and similar situations have occurred this year as well, with returned clothes carrying the scent of laundry detergent.
The practice of exploiting platform policies to the detriment of businesses, causing substantial losses, is not uncommon. In late April this year, over 60 students from a vocational and technical school in Shenyang collectively purchased clothes online, and after participating in a sports event, collectively returned the items under the guise of “quality issues”, resulting in the shop owner losing at least 8000 yuan.
A woman named Li, engaged in women’s clothing e-commerce in Guangzhou, told Yangcheng Evening News, “During last year’s Double Eleven, we stocked up 5 million yuan worth of goods, but the returned goods amounted to nearly 4 million yuan. Just the freight insurance cost us 120,000 yuan. Many of the returned clothes showed obvious signs of wear and tear, making them unsellable, leading to a direct loss exceeding 800,000 yuan.”
Even top brands are facing similar issues.
Mr. Zhang, a responsible person from a top online sales enterprise, revealed to Yangcheng Evening News that their company’s annual sales exceed 100 million yuan, but the net profit is only two to three million yuan. “Just dealing with the costs of warehousing, picking, cleaning, and repairing due to returns, we spend nearly tens of millions a year. In addition to platform commissions and promotional costs, profits are compressed to the point of being almost invisible.”
It is reported that despite the heavy losses, the process of safeguarding rights and providing evidence is complex, and the difficulty of collecting evidence is high, leaving most merchants to bear silent losses.
According to reports from Yicai, some merchants who cannot bear the losses have been forced to withdraw from the market, and in some cases, even ran away leaving debts unpaid.