Cash-On-Delivery or COD is considered to be one of the game changers of the Indian ecommerce scene. Consumers could pay for their purchases once they received them in hand, which led to the increase in popularity of online shopping.
Adding a new chapter to the COD process, Jabong will instantly refund money for COD customers. Starting this week from Delhi, pick-up agents collecting packages from customers from their doorsteps will pay them cash on the spot. Jabong plans to extend this service across the country eventually.
Why has Jabong taken this step?
Although COD is a popular payment option with consumers, they complain when payments gets delayed for their returned products. They argue that they paid right away when collecting the product, so its logical that the money should be returned when they return it.
“Customers started complaining that while they pay immediately for products, they had to wait for weeks for refund. They complained that it wasn’t fair,” says Vijay Ghadge, COO of logistics firm Gojavas, which will be managing the cash payments for Jabong.
For the past four months, Gojavas has been testing its instant cash payment system, GoRupiah. Set to roll out in Delhi, it has made a reverse-logistics team of around 250. After clearing a refund, Jabong will transfer money separately to Gojavas and the logistics company will clear payments with the consumer.
It is unlikely that marketplaces like eBay, Amazon, Flipkart, Snapdeal and others with multiple sellers can implement a facility like this. The general process of returns is refund after inspection of products. In the absence of this, do you think Jabong will be able to pull this off without hampering their profits?