The menace of products returns is something that every online seller is familiar with. The confusing returns & refund policies has been breaking sellers’ back ever since online shopping picked up. High returns also led to payment reconciliation issues and complicated reports made it even more difficult for sellers to keep track of their payments. In July entered GST, which has its own set of problems.
Product returns, reconciliation and GST are three of the main pain points that on their own are hard to deal with. But sellers say that things take a turn for the worse when the three issues get intertwined.
With GST, it’s hard to handle the load of returns, says seller
“Return was not a lesser pain and to that GST got added to it. It is getting difficult to align the online business with loads of returns coming in. And then accounting and keeping track of credit notes and on top of that returns has to be filed every month,” says online seller Abdul Kadir Natali while speaking to Indian Online Seller (IOS).
He adds, “Still many are unsure about what to do and not to do while filing GSTR1, 2, and 3. And again this returns and reconciliations are making sellers’ lives very busy, distracted and miserable. Marketplaces with their ANTI SELLER policies are making sellers’ margin thinner and thinner.”
IOS asked Abdul if marketplaces share enough data and details for payment reconciliation. And do they provide assistance in the post-GST period so that sellers understand the exact money due to them.
Abdul states, “Marketplaces are nowhere interested in assisting seller for FREE. For that they provide 3rd party service, which they promote as SPN (Service Partner Network). Marketplaces only know how to milk undue money from sellers and reconciliation is a headache because reconciling your own money is made difficult by these bully marketplaces.”
Impossible to match payments with the marketplaces, says seller
Seller Mayank Goyal also reiterated what Abdul says above. Goyal shared that in an online business, reconciliation is the toughest job for any seller. There are many tools, software and some SPNs that provide reconciliation services. But they all charge money from the sellers.
“Online business has much more competition and lesser margins. And if seller will give money to SPNs, the margin per product will reduce even further. The best practice for reconciliation is excel sheet on any given day and time. Marketplaces accept the return request in seconds. And seller has to keep track of the returned items and whether he has received or not, which is very tough to handle. But excel sheet can reduce that headache but the seller has to do manual work,” advises Mayank.
Mayank says that with GST, returns have become even more complicated as marketplaces don’t share enough data.
“It’s next to impossible to match the data with the marketplaces. Some marketplaces have charged double the taxes for sales and for returns. And seller has to go with the marketplaces data so that no difference comes while filing. But here sellers loses money in the name of tax,” avers Mayank.
No requirement to select GSTIN of the e-commerce operator, says Amazon
IOS realizes that sellers are finding it difficult to reconcile their payments, especially after GST was implemented. There’s a confusion related to filing GSTR1. Sellers want to know if they need to submit state specific GSTIN of e-commerce operator according to the state in which the sale is being made. Few sellers said that the GST portal is not accepting the main GSTIN of marketplaces’ head office if the sale is made in any other state.
Therefore, we asked Amazon if they could clear the above-mentioned doubts so that IOS could communicate the same to the seller community.
Amazon India spokesperson affirms, “The requirement for sellers to disclose the supplies made through e-commerce operator in GSTR1 returns arises only if the e-commerce operator is liable to collect TCS. As TCS has been deferred, there is no requirement to select GSTIN of the e-commerce operator in the GSTR1 by the sellers. Once TCS reporting requirement is notified by the government, we will share Amazon’s e-commerce operator GSTIN ID with the sellers.”
In other words, Amazon sellers can continue to follow the procedure that they were following before GST was implemented. Once the TCS liability comes into the picture, the etailer would inform sellers about what to do next and how.
IOS also communicated to Amazon that quite a few sellers are feeling lost due to lack of personal support and assistance as far as GST is concerned.
Amazon’s representative says, “To provide any GST related assistance to sellers, our ‘A-Z GST Guide’ programme covers all details in the form of tutorials, blogs, free online training sessions and paid professional support from third-party service providers.”
We need special GST related seller support service, say sellers
Seller Abdul points out that instead of providing assistance in the form of FAQs and webinars, a special seller support section only for GST is the need of the hour. He says that some sellers are not able to sell due to lack of knowledge about GST, its benefits and the pros of registering their business.
Mayank wants marketplaces to share simplified data.
“Marketplaces should provide enough and simplified data to seller so that he/she can easily file their returns. But why would marketplaces do that? They just don’t want sellers to reconcile their accounts. They are not providing the monthly invoices till now. So it’s going to be tough for sellers to reconcile the data of returns,” shared Mayank.
Facing reconciliation issues due to heavy returns on Flipkart, says seller
IOS had emailed Flipkart the same set of questions as Amazon. Flipkart sellers too are confused about filing GSTR1 and need assistance. But the Bansals-led company didn’t reply to our email.
This brings us to a telephonic conversation with seller Himanshu Agarwal, who says that reconciling payments on Flipkart is a tough task. More so, in the case of product returns. And the marketplace’s indifferent attitude doesn’t help either. On the other hand, he is impressed by Amazon’s seller support service in this regard.
Himanshu says that if he ships his orders on Sunday, then a week later by Monday Amazon releases his payments after subtracting all deductions, fees and returns. But on Flipkart, the returns drag on for months.
“The sale volume is good on Flipkart. But the problem is their seller support service, which is poor compared to Amazon and Paytm. Nobody listens and no one replies to emails except for automated robotic replies. There’s no decision maker; matter keeps getting escalated with no resolution. While Flipkart’s support executives are always in a hurry to close the call, Amazon representatives don’t end the call until they find the source of the problem and the solution,” asserts Himanshu.
Amazon India’s seller support isn’t flawless either. But Himanshu believes that Amazon at least tries to help buyers and sellers, as opposed to Flipkart that sides with buyers most of the times. Clearly, the seller support experience varies from seller to seller because it is often Amazon that gets accused of siding with customers.
The seller thinks that COD orders contribute to the high rate of returns on Flipkart. Himanshu shares, that irrespective of the value of the item, the home-grown etailer allow customers to place COD orders (seller has no say in it). And many customers take advantage of it by placing orders under fake name and address. He doesn’t think that GST has any role to play in this heavy returns-reconciliation saga. The blame only lies with the etailer, according to him.
As of now, Himanshu has made his listings offline on Flipkart. He’ll activate it if and when Flipkart accepts his ‘Self Ship’ request, which the etailer has rejected in the past.
Sellers, are you too facing payment reconciliation issues due to returns and GST? If so, then have you found any solution? Could you answer the questions that Flipkart chose not to answer? Please do share with our seller community by commenting below.