Walmart.com to offer easier returns for marketplace purchases

Discussion
Photo: Walmart
Aug 10, 2018
George Anderson

Walmart.com is looking to improve the shopping experience for customers making purchases from third-party sellers on its online marketplace by making it easier for them to return products they do not want.

According to a memo sent to marketplace sellers and obtained by CNBC, Walmart.com customers will be able to see return policies for individual items and print shipping labels directly from the site beginning in the fall.

Marketplace sellers will be able to take advantage of Walmart’s “Returns Shipping Service” to receive discounted shipping rates. The third-party sellers will continue to set the terms and costs of returns.

The memo promises future steps that will benefit third-party sellers when it comes to returns. “We have a big opportunity to use our 4,700 stores across the country to make marketplace returns even easier. … No other retailer has the size and scale to provide this level of convenience. We think it will be a game changer for you, our sellers, to be able to provide a better customer experience to our joint customers.”

The return of goods sold online has been pegged at between 15 to 20 percent of sales, well above the eight percent average for stores, according to the commercial real estate services firm, CBRE. The high rate of online returns has been tied by sites such as Amazon.com offering to take back products at no charge.

Amazon has sought to make purchasing from marketplace sellers on its site more attractive by lowering the price on goods sold by third-parties in key categories. The e-tail giant, which reimbursed sellers for any discount it added above the original price, marked applicable items with tags that read “discount provide by Amazon.” Some third-party sellers were unhappy with Amazon’s decision after realizing that price parity clauses with other retailers, including Walmart, may have been violated by the action taken by the e-tail giant.

Third-party sellers were also unhappy, CNBC reports, last year when they learned they would be responsible for the associated costs of Amazon’s new, friendlier “automatically authorized” return policy for return of their goods.

DISCUSSION QUESTIONS: What effect do you think Walmart.com’s friendlier return policy will have on site sales and its ability to recruit third-party sellers? How do you expect Walmart to use its stores to help with returns to third-party sellers on its marketplace? Will this be a game changer?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"This is another tool for Walmart as it continues to innovate to compete with Amazon."
"The challenge now for Walmart is getting return rates down, as this change could lead to an increase in that area, similar to what Amazon sees."
"No one bats a thousand. Not every item you purchase is as expected and this is more so when the purchase is made online."

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22 Comments on "Walmart.com to offer easier returns for marketplace purchases"


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Mark Ryski
BrainTrust

Growing the range of products available to shoppers via marketplace is key for Walmart to match Amazon’s breadth — a friendlier returns policy will help them recruit more third-party sellers. Walmart’s physical store presence remains one of their key advantages and they continue to find interesting ways to leverage it. This new returns service appears to be a smart, tactical move to enhance/grow marketplace by Walmart, but it’s not a game-changer.

Ken Lonyai
BrainTrust

Transparency and reduced friction are always positive for customer experience.

For sellers, it sounds like a benefit, but until it’s in the wild for some time and they experience how efficient and favorable the system is, I’ll take a wait-and-see approach. How fast will items returned to a store make it back to marketplace sellers? Once a store accepts an item, is the seller bound to the return even if the buyer damaged it? Etc…

Art Suriano
BrainTrust

I see Walmart.com’s return policy being successful. Returning items is always a burden for customers especially when there is shipping involved. Having the option of returning an unwanted purchase is excellent for the customer and smart for the retailer. For the customer it’s a great convenience, and for Walmart it’s an intelligent way of getting the customer in the store. Walmart has a tremendous advantage of having 4,700 stores in the U.S., which will make this program a huge success. E-commerce has got to understand that returns will always be high because too often what the customer is expecting is not what they receive. Since customers cannot see and touch the item before purchasing, return rates will stay high.

Lyle Bunn (Ph.D. Hon)
BrainTrust

Streamlined return offers incremental improvement to the shopping experience, but the game-changer lies in reducing the number of returns. Returns are an expense for everybody and they add nothing in commercial value. Making returns easier seems to add to the problem.

Steve Montgomery
BrainTrust

The ease and cost of returning items bought on the internet has grown significantly in importance when making a purchase decision. In many cases the customer has the ability to purchase the item or ones similar to it from various internet retailers. The difference in their shipping and return policies can be the determining factor as much or more than small variations in price.

Bottom line — Walmart.com’s new return policy will have some positive impact on its recruitment efforts but is not a game-changer. Other factors third-party sellers will use to make their decision are well known, most importantly the site’s traffic and how easy it is for a potential customer to find items.

Mohamed Amer
BrainTrust

No one bats a thousand. Not every item you purchase is as expected and this is more so when the purchase is made online. So by easing and clarifying the return process, you actually lower the hurdle-to-purchase for the consumer and can deliver higher conversion across Walmart.com. Yes, you risk a rise in the return rate, but if your item descriptions and images are clear and complete, and can include customer feedback, then you can effectively reduce exposure to the returns bugaboo.

This is a great move by Walmart that should benefit the company, third-party sellers and of course the key to all this: the consumer.

Neil Saunders
BrainTrust

This makes a lot of sense and is part of Walmart’s attempts to bolster its marketplace and compete more successfully with Amazon. The key with marketplaces is to try and standardize policies, information and services as much as possible. Not only does this protect Walmart’s brand, it also gives the consumer confidence in purchasing.

Bob Amster
BrainTrust

It won’t be a game-changer but it is a way for Walmart to woo third-party sellers away from other sites and onto its own.

Ken Morris
BrainTrust

Return policies are a big deal for consumers. According to a recent study by Incisiv, Retail’s Digital Crossroads: The Race to Meet Shopper Expectations, 68 percent of customers would more likely shop at a retail brand that offered automated returns. Returns are also one of the greatest challenges for online retailers. Walmart’s strategy to make returns easier for consumers and third-party sellers will be welcomed by both parties and should help drive more sellers and transactions on Walmart.com’s marketplace.

The side benefit for Walmart is the incremental sales driven by marketplace returns at Walmart’s physical stores, as consumers will likely buy a few things on the visit to the store. This is another tool for Walmart as it continues to innovate to compete with Amazon.

David Naumann
BrainTrust
Chris Petersen, PhD.
BrainTrust

From Walmart’s perspective, they must stay competitive and meet customer expectations on ease of returns. Third-party sellers have been more than unhappy with Amazon’s policies and arrogance. They need a viable alternative marketplace. This could be a major strategic win in recruiting third-party resellers to its marketplace. The timing couldn’t be better. This is yet another example of how Walmart has changed its behaviors and strategy to remain competitive in an omnichannel world. The battle online is more than winning customers. It requires a viable and profitable marketplace that attracts third-party sellers.

Gene Detroyer
BrainTrust

Of course this is good for all: Walmart, third-party sellers and the shopper. Anything that makes it easier for the shopper will take barriers away from buying. But a game-changer? No. This is an EXPECTATION.

Charles Dimov
BrainTrust

Returns are very important to shoppers — especially online shoppers. This can ONLY improve Walmart’s marketplace from a customer perspective. If that drives more sales, attention and becomes a more viable alternative to Amazon — then push forward! Walmart’s huge footprint is a major advantage and this is a great way to capitalize on that resource.

It isn’t going to be a revolutionary game-changer, but I think it is a major step forward. Walmart needs to aggressively promote this to both vendors on its marketplaces and to shoppers. Making returns as easy as possible is a sweet spot for customers that can start building Walmart.com’s marketplace momentum.

Shep Hyken
BrainTrust

The rising tide lifts all boats. So does an easier return policy. It benefits Walmart, the third-part sellers and, most importantly, the customer. It’s a triple win!

Ken Wyker
Guest
The announcement that third-party sellers will be able to leverage Walmart’s return service to get discounted shipping rates and that they will be able to set return policies is a smart move, but it’s not a game-changer. However, I believe that the promise to allow returns to a Walmart store can be a game-changer. The most powerful strategic moves are often those that leverage a company’s unique capabilities and cannot be matched by their competition. This is one of those moves. There are a lot of companies trying to build the next great e-commerce platform and new technology may allow new entrants to gain business from scratch like Jet.com did. But unless Amazon buys a lot more retail locations or partners with a retailer that already has a lot of locations, no e-commerce provider will be able to match the ease of “local” returns that Walmart can offer. Of course, the logistics and costs of the return process will be a huge factor in how effective it is. Now, if Walmart can use their store… Read more »
Cate Trotter
BrainTrust

Walmart have been coming out with some interesting moves against Amazon and this feels like another sensible idea. Leveraging its stores to help with returns could be a great way of making the most of how widespread its network is and in driving footfall. How it is to be executed we will have to wait to see, but it could be a kiosk-style set-up like the Doddle spaces. The new scheme also seems to be well-targeted in appealing to those third-party sellers who may have become frustrated with or turned-off by Amazon. I think it’s a smart move by Walmart to position itself as a viable alternative to Amazon with the USP of a large store network as well.

Michael La Kier
BrainTrust

Reducing any barriers to sales is a good thing for shoppers. May not be such a good thing for marketplace vendors given higher than in-store rate of returns for online vs. in-store.

Min-Jee Hwang
BrainTrust

This change should help Walmart attract both third-party sellers and customers, but it won’t necessarily be a game-changer for them as they compete with Amazon. Among many things, Amazon does a great job of offering the widest selection of products at the best prices. Walmart’s new return policy will get them closer, but only incrementally. The challenge now for Walmart is getting return rates down, as this change could lead to an increase in that area, similar to what Amazon sees.

Jeff Sward
Guest

Easy returns create the opportunity for continued dialog and understanding WHY something didn’t work as planned. What else can we try? How else can we help? Maybe not lose the sale … convert it. Solve problems … make friends.

Samantha Alston
Guest

I fully agree with Jeff’s point on this topic. Yes, seamless returns are a consumer expectation and integral to better service. Beyond that, returns are not only a cost but an opportunity. In a brick-and-mortar environment, returns are considered a chance to dialogue with customers on what didn’t work, \solve a problem (which often increases loyalty in the long run), re-convert, and up-sell. Online returns should be seen in the same way. They represent an additional transaction (albeit a “negative value” one), and a shot at building stronger customer relationships through empathy and trust. This move from Walmart.com could certainly have a big impact. It will ultimately depend on how the opportunity to engage return customers is leveraged … how information is captured and used.

Kai Clarke
BrainTrust

Walmart.com’s move to make it easier to return products sold on their website from 3rd party sellers is a smart thing to do. In reality, it is no different than a product that would be sold in their store, if it was being placed their by the 3rd party. Technically, if a product sells before the vendor has been paid by Walmart, this is what happens (and it happens a lot). This concept is going to become a standard as omnichannel marketing continues to blur the retail environment.

Larry Corda
Guest
Walmart.com and Amazon.com both sell merchandise online in addition to third-party sellers. The main difference is Walmart has numerous brick and mortar stores and Amazon has cloud services. Why does this matter? Simply, Amazon doesn’t need to be as profitable on the retail side of their business as Walmart does. It might be more practical and profitable if Amazon just did fulfillment for third-party sellers and collect service fees rather than sell merchandise themselves. On the other hand, Walmart needs this move to make them money. If you’re able to make returns at a store will it increase store payroll? Will customers who return goods spend enough money in the store to offset payroll costs? Will this be nightmare the day after Christmas in stores? Will this increase traffic on Walmart.com that equates to sales of their merchandise or benefit the third-party sellers? Walmart.com might be better off focusing on selling their own merchandise and improving a customer’s online and in-store experiences. For example, a search for cutting boards on Walmart.com came up with 5,668… Read more »
wpDiscuz
Braintrust
"This is another tool for Walmart as it continues to innovate to compete with Amazon."
"The challenge now for Walmart is getting return rates down, as this change could lead to an increase in that area, similar to what Amazon sees."
"No one bats a thousand. Not every item you purchase is as expected and this is more so when the purchase is made online."

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