Lazada Seller Tips How To Avoid Sales Return And Losses

How To Avoid Sales Returns and Losses

Published: May 14, 2023 | Last updated: May 24, 2023

If you are a lazada seller or seller of any other e-commerce platforms like Shopee and Tiktok most likely you already know how it feels like when you receive a returned order. Not only it makes you feel bad but also it hurts your profit, right? In this article, we wil discuss and share you tips and best practices on how Lazada sellers can avoid sales returns and losses.

What is a Sales Return?

Before we proceed let's try to define first what a "sales return" is. A Sales return, which is also known as return inwards, is simply a cancellation or return of goods carried out by the customer for various reasons such as damaged or faulty item, wrong item received, missing item and among others.

To make this topic more interesting, let's add a twist by answering a million dollar question:

"If the cause of sales return is neither the seller nor your buyer's fault, whose fault is it?"

Just keep on reading and you'll find the answer... :)

Improving Lazada Sellers' Operations With Tips In Avoiding Returns

On April 14, 2023 Lazada had a live session to ring up the curtain on improving sellers' operations with tips in avoiding returns. The session, entitled "How to Avoid Returns plus Policy Changes!", heavily focused on what lazada sellers MUST do. As usual, burden and losses are neither on the buyer nor on the e-commerce platform. It is always on us, sellers!

During the discussion (in a controlled environment), it is no surprise that crucial scenarios and important concerns brought up by some sellers were either deliberately shrugged off or not properly addressed. As commented by one of our ka-sellers:

"Please on your next webinar, do not summarize, change or rephrase the questions asked by sellers. What happened here is, you rephrased very important concerns which was not answered properly by ***, such us: 1/ How about if nireturn ni client kasi wrong item daw pero correct item naman yung napadala"

The concern raised by our ka-seller is without a doubt valid and crucial that should have been addressed by the host. The buyer initiated a return claiming that the seller sent a wrong merchandise, whereas the seller claimed otherwise. For this scenario, can we apply any of the tips provided in the live session? Why do you think the host rephrased the question instead of addressing the concern that was brought up?

On April 22, 2023 a question was posted on Lazada Community portal

"QUESTION: How To Avoid Returns po mga maam at sir? MODs If the seller sees that a return is imminent on a pending order due to invalid address plus the buyer is unresponsive and the seller already submitted a cancellation request via ADA but your PERTINENT TEAM declined the request, what other steps must the seller do to AVOID SALES RETURN?"

As you might expect, none of the Lazada Community Portal moderators bothered to answer. Not sure if you have noticed their downplaying tactic. What they do is kill and burry your issue by boosting old posts and by flooding the feed with posts made by their army (those profiles with an image of a person infront of a laptop or desktop).

What is the threshold for sales return?

Needless to say, an abundant amount of sales returns have stupendous adverse impact on the financial statement of our businesses as it leads to reduction in our net income. Be mindful of your sales returns and set a threshold.

It was not until 12-12 Mega Sale (year 2022), where there was a sudden influx of delayed deliveries and returns (majority were from J&T Express Philippines), that we revised our threshold for sales returns from three percent (3%) down to ZERO percent (0%).

It's a matter of entrepreneurial mindset and simple formula...

Excellent Product Quality & Condition + Excellent & Error-Free Fulfillment = Happy Customer

The point is, if the seller's fulfillment error rate is as good as 0% for the entire year of 2022, the return rate of that Lazada Seller should and must be just a fraction higher than its error rate and must not carry the burden of having any losses especially if the cause of the return wasn't the seller's fault! Makes sense right?

Now, here's a real scenario that happened between December 12 - 30, 2022. Madamme X, a regular and repeat customer, purchased a box of Pullnaps Interfolded Paper Towels but the she refused to receive the order on the day that J&T delivered the parcel. On the very same day that Madamme X rejected the delivery she placed another order but this time it was for 2 boxes. The order was assigned by "Lazada's Algorithm" to another courier. The second order was delivered and received by Madamme X the next day.

What Is The Threshold For Sales Return
Figure 1: Box condition when epicked-up by J&T
J&T Express Philippines Tracking Parcel
Figure 2: Box condition when returned by J&T

Can you guess why this Lazada buyer rejected the first delivery at doorstep? If you think neither the Lazada Seller nor the buyer is at fault, so who's fault is it?

Importance of Systems and implementation of Standard Operating Procedures

The use of systems and implementation of Standard Operating Procedures or SOPs play an important role in reducing costly errors and increasing profitability. The importance of these two should not be underestimated as both serve as guides to a wide range of tasks or even to specific situation.

...and there goes our cue to introduce to you the system we have developed and share the processes we do based on our SOPs. So, without further ado here are our Lazada Seller Tips on how to avoid sales return and losses.

TIP No. 1: KYC Check - Know Your Customers

Before you hit that Pack & Print button on your Lazada Seller Center you might want to conduct a KYC Check first. Don't be a clicker happy! KYC check is mandatory and a requirement in regulated industries like banks or financial institutions. KYC or Knowing Your Customer is a best parctice for any business as well. How is it done? Let us show you how.

  • STEP 1 : Check your customer's order history
  • Once you receive a new order, on Lazada Seller Center desktop version go to orders, then click on the name of your customer and a new tab will open and you'll be on Lazada Chat. On the right side of the page there you'll find the pending order and previous orders (see Figure 3) placed by the customer on your store. If the only order that you're seeing is the pending one, that means you have a new store buyer.

    Here's a hellish fact...

    On the 1st of April 2023, a new buyer placed an order on one of our stores for 1 tissue item worth Php555.00, as shown on figure 3. By following steps 1 - 4, we had a strong reason to believe that the order was High Risk and a return was imminent. Order Cancellation was requested to Partner Support Center (PSC) of Lazada however the cancellation request was turned down due to the "New (unintelligible / senseless) Policy Of Lazada" and according to the support agent the order must be processed since "the system verified the order". Not surprisingly, the parcel was intercepted at the sortation facility of Lazada Express PH or Lex PH due to, believe it or not, "Invalid Address".

    The same buyer placed an order again on April 19 for the same item, Sanicare Hand Roll Towel With Dispenser. This time around the cancellation request was done thru 2 different channels: PSC and ADA. Unfortunately, both cancellation requests to avoid a return were declined. The hellish and hardest fact to accept is Lazada ripped us off for a total amount of ₱1,110.00!. Both returned orders due to "Invalid Address" were Scrapped by Lazada

    "A sales return was imminent. We tried to prevent and avoid having any returns and financial losses but Lazada forced us to process and ship out the orders. Our items were scrapped by Lazada and surely they will be making profits out of it. That's a total rip-off!"

    So, who's fault is it?

    Figure 3: Buyer's order history
    Check Your Customers Order History on Lazada Seller Center

  • STEP 2 : Review the Delivery Rate and Delivery Count
  • From the chat page toggle back to order management page then click on the order number. You will be redirected to the order detail page. The first thing that you will check on this page is the Delivery Rate and Delivery Count of your customer which you can find in the buyer information section as this piece of information can also give you a hint.

    Review The Delivery Rate And Delivery Count On Lazada Seller Center
    Figure 4: Out of 141 Lazada orders placed by this buyer in the last 60 days only 24 orders were successfully delivered

    These two data can help you make an initial assessment for probability of a sales return. Make sure to set your own parameters for the Delivery Rate. You may want to consider looking into the payment method used by your buyer.

  • STEP 3 : Scrutinize the billing and shipping details
  • Closely look for indicators or inaccuracies, especially on the shipping address, that could cause the order to be returned. If neccessary, validate the address through any available resources you may have or access to.

    Shipping address validation helps you verify the accuracy of your buyer's address number, street name postal code and ensures that your parcel will reach its destination. For obvious reason, this step is a must-do process since Lazada, Shopee and Tiktok users are not required to verify the billing and shipping details they provided.

    Scrutinize the billing and shipping details
    Figure 5: Shipping and billing
  • STEP 4 : Test The Waters
  • If in doubt or if you find that a sales return is imminent dont hesitate to to engage with your customer by sending a chat message asking to either verify the shipping address or confirm their order, which ever the case may be.

    Test The Waters
    Figure 6: Out of 141 Lazada orders placed by this buyer in the last 60 days only 24 orders were successfully delivered

TIP No. 2: Religiously Track Your Sales

Religiously Track Your Sales

Religiously tracking your daily sales not only helps you identify potential patters and forecast future sales but it also helps you prevent losses. You can track your sales in many different ways. If you're a Lazada Seller, may it be in Lazmall or marketplace, and you dont have the infrastructure yet to store your sales data, you can just simply use excel, google sheets, logbook, ledger, or anything that you prefer to use. On our end, we developed our own web app for sales tracking, inventory management, bookkeeping, auditing and all that jazz.

Once we're done with the KYC Check and if everything is perfectly fine, we then proceed tracking the order using ARB or Amanda.

What is ARB System?

This may sound hilarious but ARB stands for Amanda Raya Buster. ARB is a progressive web application (PWA) conceptualized and developed by Clickerwayne for Wholesale Dito Store as an offensive tool to record, monitor and analyze logistics and ecommerce platforms' modus operandi, vulnerable practices and operational loopholes.

In our day to day operation it is imperative that we first track the orders on Amanda. Without doing so, we are unable to proceed in processing or packing the orders. It's a standard operating procedure that we must adhere to and follow.

TIP No. 3: Documenting Processed Orders

Always, make it a habit to document each product you ship out. This will serve as your evidence if something happens. Let's take that the scenario raised by one of our Lazada ka-sellers which the host from Lazada failed to address during the live session on How to Avoid Returns plus Policy Changes!

The buyer claims that the seller sent the wrong item whereas the seller claims otherwise. Of course as you all know, we can invalidate the buyer's claim and reject the return provided that our Lazada Ka-seller has all the supporting documents that would serve as proof that correct items were packed and shipped.

You can take pictures of all orders you fulfill. You may use your mobile phone to take pictures however it'll eat up alot of memory space once saved images start to pile up. Another thing, it'll be time consuming to go through all the pictures to look for the ones you need to reject buyer's return, filing a claim incorrect weight adjustment and among others.

Keeping evidences to counter such buyer's claim or to dispute fraudulent charges imposed by Lazada, Shopee and Tiktok will greatly help you avoid loosing money and waste your valuable time.

Documenting Processed Orders Lazada

Key Takeaways

Sales Return is commonly defined as a cancellation or return of goods carried out by the buyer for various reasons. However, this definition is not applicable especially if you're selling on ecommerce platforms like Lazada, Shopee and Tiktok. In this space, the trading of goods is no longer just between the buyer and seller. There are other parties involved in between. The plaform and the courier have participation to fully complete the selling process and either the former or the latter can cause a sales return. It's a fact that the ecommerce platforms and logistics companies dare not to talk about inorder to avoid and unshackle themselves from all sorts of liabilities. In other words, the burden is always on us...OUCH!

Regardless if you're running a micro or small business, it is worth the time to have and implement your own standard operating procedures. Protect your business, teammates and your customers by structuring your operations for accuracy, efficiency and consistency.

It's a humongous shame that Lazada and Shopee operate with topsy-turvy and shady seller programs, procedures and policies. We're not going include Tiktok yet as we are still observing and gathering data about their processes and policies. We have not encountered major issues yet with them. Let's hope it'll stay that way.

Kudos to Tiktok! Over the past two weeks their delivery rate improved and "re-attempt to deliver" status are no longer appearing on a daily basis. We assume Tiktok had called the attention of J&T for their horrible and sub-standard service. Hooorah! #SMILE

"We were silently minding our own business until we were outrageously miffed by Lazada"