Product Returns for Brazilian E-commerce

The Brazilian regulation for e-commerce institutes specific measures for the handling of product returns. In this article we will highlight this regulation and the most common practices operated by e-commerce companies in the country.

Statistics for E-commerce Product Returns in Brazil

The Webshoppers report from March 2014 by Brazilian e-commerce intelligence company E-bit present some notable insights about the return of products bought via e-commerce in the country. Their research data suggests that:

• 20% of Brazilian customers have encountered difficulty in returning products bought via e-commerce
• Bureaucratic and troublesome procedures were the leading cause for not returning products
• 47% of customers decided to shop offline due to the difficulty in returning products bought via e-commerce

These statistics not only indicate that product returns are considered troublesome by Brazilian e-commerce customers but that a large number of purchases may be lost due to the perception of the difficulty in returning these products. E-commerce vendors should keep this in mind when operating in Brazil, and provide efficient, simple methods for handling product returns as a way to attract more customers, while also being compliant with the country’s regulations for this sector.

Regulation and Procedures for returning products bought via e-commerce

The Brazilian Consumer Defense Code, or CDC, specifies that all non-presential purchases, such as purchases handled via telephone, internet or other mediums, grant consumers the right for a seven-day regret period after delivery or service contract, during which time, products can be returned to the seller at no additional cost to the consumer.

In cases of malfunctioning products, regulation also requires e-commerce companies to allow product returns during a 30 day period after delivery for non-durable goods, like food and clothing and a 90 day period for durable goods, such as consumer electronics. After products are returned, customers are able to choose whether to be paid back all charges for the purchase and delivery or require a replacement product at no additional cost.

The handling of returned products and any specific measures applied by the vendors also need to be part of the Company Policies, which must be visible on their e-commerce web pages.

Procedures to handle product returns

Regulatory requirements for e-commerce encourage Brazilian companies to:

• Establish a customer service department where consumers are able to find information and instructions on how to return products
• Operate a reverse logistics stream for customers to be able to transport products back to the seller at no additional cost
• Be in direct contact with the credit card networks and banks to require immediate chargebacks and inform customers of when the charges will be returned

The implementation of a contact center and the direct communication with credit card networks and banks are part of everyday operations for the majority of e-commerce companies. Considering this, the most difficult and time-consuming part of handling product returns should be the operation of an efficient reverse logistics stream able to comply to regulations of free return shipping.

Reverse Logistics

A commonly adopted procedure by Brazilian companies is to partner with Correios, or the Brazilian Postal Service, and apply for one of the offered e-commerce reverse logistics plans, all of which are compliant with the regulations for this sector. Correios currently offers four reverse logistic plans for e-commerce companies, which include:

• Collecting products at the customers household
• Collecting products while simultaneously delivering replacements at the customers household
• Free shipping of returning products at Correios or affiliate agencies, following the issuing of a Postal Authorization Code, or Código de Autorização de Postagem
• Simultaneous free shipping of returned products and delivery of replacements at Correios Agencies

Reports by Brazilian consumers suggest that the most popular procedure chosen by these companies is the self-serving plan from Correios, which allows customers to contact the store’s support service, require a product return and receive an email with the Postal Authorization Code, which allows theo direct shipment of the returned product at Correios or affiliate agencies at no additional cost.

Software Vendors

Even though the Brazilian regulation for e-commerce does not imply specific measures for the commercialization of software and other digitally distributed products, this sector is still subject to the general customer rights regulation for product returns and regret period.

The most adopted procedures by these vendors is to allow the return of both product and paid charges within a period of seven days after:

• Software is delivered, in case of boxed products
• Software is activated, in case of digitally distributed products