Flipkart Debuts Partial Payments To Reduce Cancellations, Returns

Flipkart has launched a payment method that lets customers pay for a portion of a product upfront and the rest on delivery, Business Standard reported.

In an email, the eCommerce company, which is based in Bangalore, India and is part-owned by Walmart Inc., told sellers that the “Part Payment” option would encourage prepaid transactions and reduce returns and cancellations.

Under the plan, shoppers have the option to pay the remaining balance in cash upon delivery or online. The rate of pay will remain the same for part payment orders, the online news website reported. 

Typically, online stores based in India offer prepaid, cash on delivery (COD) or equal monthly installment payments options for consumers who are purchasing products. Retail experts have said the COD option has spurred fake buying, higher cancellations and returns, which drives up logistics costs. 

This week, Flipkart Group raised $1.2 billion in a funding round led by Walmart, the company’s majority owner. The investment values the startup at $24.9 billion.

Flipkart CEO Kalyan Krishnamurthy said the company is rapidly expanding its offerings from electronics and fashion to include grocery and other merchandise. “We’re grateful for the strong backing of our shareholders as we continue to build our platform and serve the growing needs of Indian consumers during these challenging times,” he said.

The latest edition of PYMNTS’ Subscription Commerce Conversion Index, raised the question of which features merchants must have to keep members loyal and engaged.

The analysis revealed that it is becoming increasingly critical to provide additional features to enhance the overall offering. In addition to giving subscribers the option to pause their subscriptions, offering free trial periods, rewards programs and free shipping are seen as vital to enhancing customers’ subscription experiences and convincing new users to sign up, the survey said.

All India Online Vendors Association (AIOVA), a trade group for eCommerce sellers, posted its support for the option on Twitter, noting that it has advocated this method for years. “Will other marketplaces follow this move?” AIOVA wrote. “This move can lead to 2-3 percent reduction in prices for consumers, as currently losses of such undelivered orders were factored as a cost.”