What it really means by “instant” is that customers can now expect their money back within an hour of Snapdeal receiving the returned item. The company said it has teamed up with “one of [India’s] largest private banks” to accomplish this.
Amazon, meanwhile, seems to be lagging behind both competitors in the country; it typically still requires one business day to process a refund, and then an additional 2-4 business days for the refund to reach the customer.
Snapdeal is claiming this as a first in terms of offering “an automated, API-based, real-time, highly reliable, secure instant refund transfer system based on IMPS technology.” Yes, it’s a mouthful — and there’s probably a catch in there somewhere.
— Snapdeal (@snapdeal) September 11, 2015
Because a large proportion of India’s ecommerce market still relies on cash-on-delivery, the company said that, “100 percent of customers using the cash-on-delivery facility will have access to IMPS (immediate payment service) 24/7, while bank holidays will have no impact on this service either.”
Citibank India describes IMPS as follows:
[The service] allows customers to instantly transfer money online or from mobile phones using their registered mobile number.
Based on this, it seems that while a customer may pay Snapdeal’s delivery person in cash for an item when they receive it, to get an “instant refund” they will have to process it through the IMPS system (i.e. there is no cash refund option).
This likely means receiving it as an online transfer into a bank account or mobile ewallet, or cashing it out at an offline money transfer agent. In any case, I think it’s safe to say that consumers in India are used to dealing with these things.
eBay just sold a portion of its stake in Snapdeal in August, about 18 months after leading a $134 million funding round into the company. Alibaba, Foxconn, and SoftBank are also existing investors in Snapdeal.
In June, Snapdeal hired former Yahoo executive Anand Chandrasekaran as its new chief product officer.
“We hope that customers never want a refund,” Anand said in a statement on today’s launch, “but we respect that it is a crucial part of the customer’s return experience. Having said that, we are extremely proud to introduce the country’s fastest instant-refund facility, assuring our customers the most seamless refund experience.”
“We have already noticed that close to 100 percent of refunds take place within an hour, and 85 percent within 30 minutes, making this a highly reliable refund service for our customers,” he added.
Ultimately, the spoils will be huge for whichever company manages to gain an edge in India’s ecommerce market — expected to be worth $60 billion by 2020, according to Credit Suisse.