This experience reminded me why Amazon could crush Australian rivals

Millie. (Image: Tony Yoo)

A purchase through online retailer Kogan reminded me why Australian retailers could fall behind Amazon when it launches its local retail arm this month.

I recently bought an electric pet feeder on Kogan. As the device was marketed under Kogan’s in-house label, delivery was free and there was a 14-day money back guarantee.

Great, I thought – a no-risk purchase. If it doesn’t work the way I want, it would cost me nothing to return and get a refund.

Unfortunately, on first use it was obvious the unit wasn’t what we needed. The feeder was not specific about the animal it was designed for, and it was apparent in practice that it was designed for large dogs.

We have a cat.

Millie is a pretty large cat, but the machine’s smallest dosage was four times what she should be eating each meal. Leaving her with the auto-feeder would have been dangerous.

I contacted Kogan to invoke the money back guarantee. But I was surprised to receive a reply that, despite the incoming delivery being free, the supposed “money back” did not include return postage.

“If your item is under 1 metre and 20kg, we will provide a link for you to purchase a prepaid AusPost label for a flat fee of $12.88. Otherwise, you can return the item via post or courier at your own cost,” said the Kogan staffer.

The $12.88 return postage is almost 12% of the purchase price.

Amazon built its success internationally by killing off all the reasons why a customer would prefer to visit a physical store over shopping online. Two of the biggest factors are not being able to inspect and try an item before handing over your money, and not being able to return an unsuitable item.

In the US, Amazon long ago removed these obstacles by allowing customers to purchase a product then return it for a refund if they’re not satisfied, within 30 days for a full refund and partial refunds for periods beyond than that.

And many Amazon-fulfilled items are marked “Free Return”, which means there are no postage fees on returns.

Earlier this year, Amazon even reportedly introduced the concept of “returnless refunds”. This new policy allows a dissatisfied customer to receive a refund without even returning the product — if the item is deemed too expensive to mail back or of the merchant would find it too difficult to resell.

This “no risk” refund culture has even been adopted by some Australian online merchants – like fashion retailer Asos Australia — but most, like Kogan, still deter customers from demanding refunds with an onerous return postage cost.

The question for Australia is how the US giant will pitch its offering. At the moment the site says: “return shipping costs are only reimbursed if the return is due to Amazon error”.

Industry analysts have predicted Amazon Australia could start trading before November 24, which is a big sales day known in the US as Black Friday. The Amazon.com.au site has in the past fortnight published computers, electronic accessories and household items in its catalogue, although they’re not yet available for purchase.

Kogan founder and chief Ruslan Kogan has previously publicly indicated he would look at selling on Amazon Australia. It will be interesting to see if Amazon has any influence on the return policies of its Australian third party merchants.

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