moneycontro (source) :
Globally, shipment return policies are taken by large companies to cover against the losses incurred for return of the shipment and loss of revenue.
The biggest headache for e-commerce companies is the fact that atleast 8-10 percent of the products purchased are returned by the customers. To deal with this anomaly, a few of the largest e-commerce companies are in talks with general insurers to design products that will give them protection from cancelled shipments.
“Revenues of e-commerce companies are impacted by frequent return of shipments. While the rate of returns have come down, it is still a matter of concern. Hence, they are looking for appropriate covers to bear the costs” said the head of underwriting at a mid-size insurance company.
The product that will be created will have features related to the conditions of the return of the shipment. Sources said if it is damaged due to man-made causes, the insurance will not pay for it. But, if a genuine return due to dissatisfaction with the product, the insurance will kick in.
The size of the cover will depend on the average size of the shipments and will kick in once a product delivery is either cancelled or returned by the customers. There could also exclusions for certain kind of products that have a shelf life of fewer days.
Apart from the insurance companies, online insurers are also being engaged to bring out products that are customised based on the insurance company and the segment that they operate in. The design of these products is at an early stage and official tie-ups could be announced next year.
Currently, companies take product liability insurance for protection against any customer liability due to product defects that may cause loss of life or property. If a customer claims compensation for medical ailments after consumption of any product, the cover can be used to provide the necessary protection.
Globally, shipment return policies are taken by large companies to cover against the losses incurred for return of the shipment and loss of revenue. Certain products, especially those offered under heavy discounts on a ‘Black Friday’ or certain edible items, are not liable to be covered under them.