Major Chinese e-commerce platforms including Taobao and JD.com implement the "refund only" policy which has sparked discussions among Chinese netizens.

Observers noted that the "refund only" policy will further protect the rights of consumers while encouraging merchants to improve product quality and services.

Taobao officially started the policy on Tuesday. Based on the platform's big data capabilities combining with the multidimensional recognition, Taobao will make a decision on either applying the "quick refund" or "returning the product for the refund" policy when consumers make requests for after-sales services. The announcement has been trending on Sina Weibo, domestic news site nbd.com reported on Wednesday.

The mechanism aims to offer a better user experience while taking stricter action against merchants with long-term issues of poor services and unreliable product quality.

Taobao will evaluate sellers comprehensively based on various indicators such as ratings, product quality, number of complaints and other factors to directly make the above-mentioned decisions if the products are determined to have corresponding issues. Taobao also added new rules focusing on refunds for issues related to shipment and delivery.

JD.com will start implementing the "refund only" policy starting on Friday. If merchants deliver products with quality and other issues to consumers, JD.com has the right to make decisions on whether to approve the consumer's application for "refund only" or "returning the product for the refund" policies based on the platform's multidimensional evaluation for merchants during after-sales services as well as transaction disputes, according to media reports.

The implementation of the "refund only" policy will protect the rights of consumers while reducing the cost for consumers amid the process, Liu Dingding, a veteran internet industry observer, told the Global Times on Wednesday.

Liu said that the policy will also urge merchants to step up their operating game, forcing them to focus more on product and service quality in a bid to reduce the applications for a refund. The mechanism may encourage merchants to ramp up efforts for product and service optimization, and form a more favorable competitive market environment.

The "refund only" policy was initiated by Pinduoduo in the beginning of 2021, according to media reports. Douyin in September this year announced to start implementing the "refund only" policy. The platform has the right to take measures to support consumers with the "refund only" and "returning the product for refund with covered shipping" polices during the after-sales services, if the rating for the product is lower than 70 percent.

Liu also pointed out the possibility that some users may maliciously take advantage of the "refund only" policy, urging e-commerce platforms to also take measures such as strengthening supervision to protect the merchants.

Liu said that integrating large-scale artificial intelligence (AI) models to determine the applicability of the "refund only" policy may be a potential means for e-commerce platforms to better implement the policy. The use of large-scale AI models may not only greatly improve the accuracy and efficiency of the judgment, but also significantly reduce the misjudgment caused by human factors.