Lazada Seller Tips How To Avoid Sales Return And Losses

If you are a Lazada seller or a seller on other e-commerce platforms like Shopee and TikTok, you already know how it feels when you receive a returned order. Not only does it make you feel bad, but it also hurts your profit. In this article, we will share tips and best practices on how Lazada sellers can avoid sales returns and losses.

What Is a Sales Return?

Before we proceed, let us define what a sales return is. A sales return, also known as return inwards, is simply a cancellation or return of goods carried out by the customer for various reasons. These include damaged or faulty items, wrong items received, missing items, and other issues.

To make this topic more interesting, let us answer a million dollar question:

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

Keep reading and you will find the answer.

Improving Lazada Sellers' Operations With Tips to Avoid Returns

On April 14, 2023, Lazada held a live session to help sellers improve their operations with tips on avoiding returns. The session, titled "How to Avoid Returns plus Policy Changes," focused heavily on what Lazada sellers must do. As usual, the burden and losses fall on the sellers, not on the buyer or the e-commerce platform.

During the discussion in a controlled environment, it was no surprise that crucial scenarios and important concerns brought up by some sellers were either ignored or not properly addressed. As one of our fellow sellers commented:

"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 were not answered properly. For example: How about if the customer returns the item because they said it was the wrong item, but the correct item was actually sent."

This concern raised by our fellow seller is valid and crucial. It should have been addressed by the host. The buyer initiated a return claiming the seller sent the wrong merchandise, while the seller claimed otherwise. For this scenario, can any of the tips from the live session be applied? Why do you think the host rephrased the question instead of addressing the concern?

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

"Question: How to avoid returns? If the seller sees that a return is coming on a pending order due to an invalid address, plus the buyer is not responding, and the seller already submitted a cancellation request but the team declined the request, what other steps must the seller take to avoid a sales return?"

As you might expect, none of the Lazada Community Portal moderators answered. What they do is bury the issue by boosting old posts and flooding the feed with posts made by certain profiles.

What Is the Threshold for Sales Return?

A high number of sales returns have a major negative impact on the financial health of our businesses because they reduce our net income. Be mindful of your sales returns and set a threshold.

It was not until the 12.12 Mega Sale in 2022, when there was a sudden surge of delayed deliveries and returns (mostly from J&T Express Philippines), that we revised our threshold for sales returns from three percent down to zero percent.

It is a matter of entrepreneurial mindset and a simple formula:

The point is, if a seller's fulfillment error rate is as good as zero percent for an entire year, the return rate of that Lazada seller should be just a fraction higher than their error rate. The seller should not have to bear losses, especially if the cause of the return was not the seller's fault. That makes sense, right?

Here is a real scenario that happened between December 12 and 30, 2022. A regular repeat customer purchased a box of Pullnaps Interfolded Paper Towels but refused to receive the order on the day J&T delivered the parcel. On that same day, she placed another order for two boxes. The second order was assigned by Lazada's algorithm to another courier and was delivered and received the next day.

Can you guess why this Lazada buyer rejected the first delivery at her doorstep? If you think neither the Lazada seller nor the buyer is at fault, then whose fault is it?

Importance of Systems and Standard Operating Procedures

Using systems and implementing Standard Operating Procedures (SOPs) plays an important role in reducing costly errors and increasing profitability. The importance of these two should not be underestimated, as they serve as guides for a wide range of tasks and specific situations.

Here are our Lazada seller tips on how to avoid sales returns 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. Do not be click happy. KYC, or Know Your Customer, is a best practice for any business. Here is how to do it.

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 your customer's name. A new tab will open and you will be on Lazada Chat. On the right side of the page, you will find the pending order and previous orders placed by the customer in your store. If the only order you see is the pending one, that means you have a new store buyer.

The same buyer placed another order on April 19 for the same item. This time, cancellation requests were made through two different channels. Both were declined. The hardest fact to accept is that Lazada kept our money totaling ₱1,110.00. Both returned orders due to invalid address were scrapped by Lazada.

"A sales return was coming. 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. That is a total rip off."

Step 2: Review the Delivery Rate and Delivery Count

From the chat page, go back to the order management page and click on the order number. You will be taken to the order detail page. The first thing to check is the delivery rate and delivery count of your customer, found in the buyer information section.

These two data points can help you assess the probability of a sales return. Set your own parameters for delivery rate. You may also want to look at the payment method used by your buyer.

Step 3: Scrutinize the Billing and Shipping Details

Look closely for inaccuracies, especially in the shipping address, that could cause the order to be returned. If necessary, validate the address using any resources you have access to.

Shipping address validation helps you verify the accuracy of your buyer's address, including street number, street name, and postal code. This ensures your parcel reaches its destination. This step is important because Lazada, Shopee, and TikTok users are not required to verify the billing and shipping details they provide.

Step 4: Test the Waters

If you are in doubt or find that a sales return is coming, do not hesitate to engage with your customer. Send a chat message asking them to verify the shipping address or confirm their order.

Tip No. 2: Religiously Track Your Sales

Tracking your daily sales helps you identify patterns, forecast future sales, and prevent losses. You can track your sales in many ways. If you are a Lazada seller without the infrastructure to store sales data, you can use Excel, Google Sheets, a logbook, or a ledger. On our end, we developed our own web app for sales tracking, inventory management, bookkeeping, and auditing.

Once we complete the KYC check and everything is fine, we track the order using a system we call ARB.

What Is the ARB System?

ARB stands for Amanda Raya Buster. It is a progressive web application (PWA) developed in mid-2022 for Wholesale Dito Store (then under Clickerwayne Enterprise) as a tool to record, monitor, and analyze logistics and e-commerce platform practices. In our daily operations, we must track orders on ARB first. Without doing so, we cannot proceed with processing or packing orders. It is a standard operating procedure we follow.

Tip No. 3: Document Processed Orders

Make it a habit to document each product you ship out. This will serve as your evidence if something happens. Consider the scenario raised by one of our fellow sellers that the Lazada host failed to address during the live session.

The buyer claims the seller sent the wrong item, while the seller claims otherwise. You can reject the buyer's claim and deny the return if you have supporting documents proving that the correct items were packed and shipped.

You can take pictures of all orders you fulfill. You may use your mobile phone, but saved images will take up storage space over time. Also, it can be time consuming to search through pictures when you need evidence for a dispute.

Keeping evidence to counter buyer claims or dispute fraudulent charges will help you avoid losing money and wasting valuable time.

Key Takeaways

Sales return is commonly defined as a cancellation or return of goods carried out by the buyer. However, this definition does not fully apply when selling on e-commerce platforms like Lazada, Shopee, and TikTok. In this space, the transaction is no longer just between buyer and seller. Other parties are involved, including the platform and the courier. Both can cause a sales return. This is a fact that e-commerce platforms and logistics companies avoid talking about to escape liability. In other words, the burden always falls on us sellers.

Whether you run a micro or small business, it is worth the time to have and implement your own standard operating procedures. Protect your business, your team, and your customers by structuring your operations for accuracy, efficiency, and consistency.

It is unfortunate that Lazada and Shopee operate with confusing seller programs, procedures, and policies. We are not including TikTok yet, as we are still observing and gathering data about their processes. We have not encountered major issues with them so far. Let us hope it stays that way.

Kudos to TikTok. Over the past two weeks, their delivery rate has improved, and "re-attempt to deliver" statuses are no longer appearing daily. We assume TikTok has addressed J&T's service issues.