JD.com addresses return pain points during Double Eleven, reducing freight insurance costs by over 10% to support merchants

The increasingly relaxed and friendly return and exchange policies are well-received by consumers and are also key to building core competitiveness in e-commerce. However, who absorbs the cost of returns? Is such a policy sustainable? This has become a focal point of concern in the industry.

During the annual Double Eleven shopping festival, JD.com fully upgraded its merchant freight insurance policy to help merchants reduce costs and increase efficiency while enhancing the shopping experience for users. The upgraded free door-to-door return and exchange service has significantly lowered the price of freight insurance and will implement more favorable premium policies in the long term, expecting to reduce costs for merchants by no less than 10% on average.

This freight insurance upgrade policy is seen as JD.com’s precise balance between user experience and merchant interests. Traditional freight insurance only covers the first weight, and for orders that are heavier or contain multiple items, consumers have to bear high return costs. To address this pain point, JD.com has introduced the "multiple compensation per order" and "additional weight compensation" policies, which not only optimize the shopping experience for consumers but also effectively alleviate the burden on merchants in after-sales.

Freight insurance reduction, reducing costs for merchants by no less than 10%

In recent years, domestic e-commerce platforms have been caught in "involution-style" competition, with policies like "refund only" causing significant controversy in the industry, damaging the balance between platforms, consumers, and merchants, especially putting pressure on small and medium-sized merchants.

Now, as the e-commerce competitive environment gradually improves, platforms not only need to enhance user experience but also support merchants in reducing costs and increasing efficiency, improving the overall business environment. Based on deep insights into user shopping habits and merchant pain points, JD.com has launched the freight insurance upgrade policy.

With the normalization of promotions and the popularity of freight insurance products, although order volumes have surged, the increase in return rates has also added after-sales costs for merchants. JD.com Insurance Brokerage and the JD.com platform have always focused on the operational dynamics of merchants, launching long-term policies to reduce premiums and increase coverage for scenarios such as low-margin orders, very small orders, and promotional traffic orders, with reductions ranging from 15% to 90%.

In addition, for high-quality merchants and various industrial belt merchants, JD.com Insurance has partnered with insurance companies to offer support policies with fixed rates as low as 1 cent and premium discounts. For newly registered merchants on the platform, a free one-month insurance experience is provided to help new merchants accelerate their sales.

For merchants, although freight insurance is an expense, its positive effects cannot be underestimated. It not only increases the transaction success rate but also helps merchants better estimate return and exchange costs, alleviating volatility risks.

Taking the children's products industry as an example, JD.com has analyzed orders with high claim rates and high compensation amounts, achieving precise pricing based on the performance of freight insurance claims and prices, resulting in an overall cost reduction of 30% for merchants' freight insurance unit prices. During the Double Eleven shopping festival, the cost for a leading brand merchant significantly decreased by 39%, saving up to 20,000 yuan per month, and their sales ranking improved significantly.

Enhancing user experience, helping merchants reduce costs and boost sales

Relying on strong logistics capabilities, the free door-to-door return and exchange service has always been an important part of JD.com’s differentiated service, highly favored by users. Regarding return costs, JD.com not only compensates for the first weight but also proactively covers the costs of additional weight, truly allowing consumers to return products without worries At the same time, considering situations where consumers include multiple items in their orders, JD.com has upgraded its "one order, one compensation" policy to "one order, multiple compensations," allowing all items within an order to be eligible for returns and exchanges. This means that consumers can enjoy return and exchange services regardless of how many items they purchase, further enhancing their shopping experience.

According to a relevant person in charge at JD.com, since the launch of the "one order, multiple compensations" and "reweigh compensation" policies, user satisfaction with after-sales service and NPS (Net Promoter Score) have significantly improved. For example, in the case of sofa returns, consumers previously had to bear part of the shipping costs, but now JD.com has changed to fully cover these costs, truly allowing consumers to return items with "zero burden."

Maintaining a balance between user experience and operating costs is an inevitable challenge for merchants pursuing business growth. In this upgrade of shipping insurance protection, JD Insurance and JD platform services have particularly focused on merchants' costs and losses. By collaborating with insurance companies to expand coverage, optimize claims processes, and enhance automation service capabilities, they have simplified operations and reduced additional costs, making it easier for merchants to enjoy shipping insurance benefits.

For instance, this upgrade of shipping insurance includes the cost of packaging materials for returns and exchanges. Merchants do not need to pay any fees when using JD's express delivery service for pickups, allowing them to receive applicable packaging, reducing the probability of transportation damage and lowering user after-sales complaints. Additionally, to address common pain points such as loss, damage, and impact on secondary sales during the return and exchange process, JD Insurance has collaborated with insurance companies to launch "reverse price insurance," effectively reducing merchants' risk of loss through JD Logistics' inspection capabilities.

Moreover, for the return scenarios of small and low-priced orders, JD.com has added "order retention liability protection" for merchants. Through a systematic and automated user retention mechanism, it helps merchants increase transaction rates and reduce risk of claims.

Overall, JD.com's upgrade of shipping insurance not only deepens user-friendly return and exchange policies but also strengthens support for merchants. By reducing costs and increasing efficiency while optimizing the experience, JD.com is committed to building a healthy ecological relationship between merchants and consumers, helping merchants achieve sustainable growth in the market