The Marketplace Boom   //   May 14, 2024

Mercari reverses controversial return policy changes

In March, resale platform Mercari made some changes to its U.S. marketplace, which it hoped would attract more buyers and sellers. It announced the elimination of seller fees and, for the first time, allowed returns for any reason. In turn, Mercari began charging the buyers a service fee based on a variety of factors like the name brand and the item’s category.

But on Tuesday, less than two months after the policy went into effect, the company said it was reversing one of the biggest changes.

Sellers were informed that buyers would no longer be able to initiate a return for any reason. Now, buyers have three days after an item is delivered to initiate a return, and only can do so in very limited instances. After initiating a return request, buyers have 24 hours to provide proof that the item is not how it was described in the listing. Examples include the product being damaged during shipping, the buyer receiving the wrong item or authenticity concerns. In other words: buyers can only initiate a return if there’s something wrong with the item. As Mercari plainly put it in an app notification: “Our prior return policy is coming back.”

Mercari’s about-face underscores the challenges marketplaces face in trying to please both buyers and sellers. While Mercari had previously positioned the new return policy as a win for buyers — and coupled it with new policies it thought would be appealing to sellers — there was a significant seller backlash on social media platforms like Reddit, as Modern Retail previously reported. Some sellers event went so far as to create a petition to criticize some of the changes, like a $2 direct deposit fee sellers had to pay to withdraw earnings from their accounts.

A Mercari spokesperson said in a statement: “We listened to feedback from our seller community and decided to reinstate our prior returns policy. Starting May 22, buyers will have a 3-day period to return inaccurately described items. We’ve always been committed to making buying and selling on Mercari as easy as possible. With this change, our goal is to allow some flexibility for buyers while also respecting sellers’ time and effort.”

Once Mercari announced it was returning to its old return policy on Tuesday, users on the Mercari subreddit celebrated the concession as a small win for sellers. Some noted that shoppers have already exploited the generous return policy which hurt sellers’ margins. One Redditor claimed they had four returns just this week alone, compared to just three from 700 orders prior to the policy taking effect. Another purported seller reported experiencing Mercari approving a return disputing a listing’s description accuracy, despite the photo and title being clear at the time of the transaction.

For Mercari, the first wave of changes — which included eliminating seller fees and allowing simple returns — was a way to differentiate the platform from competitors like Poshmark and Depop. 

At the time of the announcement, Mercari’s U.S. CEO John Lagerling said the company wanted to allow buyers to shop more confidently, knowing they’re able to return any unwanted items. “We thought, what do we do to… make it obvious to use Mercari for their transactions?” Lagering said. “We decided that the boldest thing we can do is to simply go ahead and abolish the selling fees.” He also called out other marketplaces more generally for increasing seller fees over the last few years. Etsy, for example, raised transaction fees from 5% per sale to 6.5% in 2022.

While a number of users on the Mercari subreddit are taking the policy reversal as a win, there is still some trepidation among both sellers and shoppers about using the platform following the changes.

“Unfortunately now I don’t trust Mercari at all and therefore just can’t risk coming back,” one seller commented. “There have been too many horror stories even outside of the new return policy, not to mention there’s still a $2 [fee] to get your own money out.”