Global refunds volume is concentrated mainly in the US with majority due to buyer requested reasons such as cancellations, returns and INRs

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Only ~40%2 of refunded buyers come back to eBay to buy a product in the same category again: Potential opportunity to get back higher proportion of buyers on the platform driving iGMV

 

CoP impact of refunds: Every refunds transaction of $100 has a CoP impact of ~107bps due to reverse money movement charges globally

 

Buyers majorly comprise of valuable customer segments which should be retained: Uber loyals and High spenders comprised ~70% of total refunds volumes with NoRBs contributing ~15% globally

 

Refunds volumes split mainly across 4 focus categories: P&A (23%), Electronics (21%), Fashion (18%) and Home& Garden (13%)

 

~85% of the refunds globally (~75% in US) are less than $1,000 in terms of size

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Phase I (Q1-Q3 2024) Strategic levers -

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Pilot offering across all usecases in one key market (US) in short phases across trusted buyer segments and assess product impact

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Set the risk foundation to counter risks associated with double chargebacks, collusion, AML monitoring, etc. and capture learnings

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​Test marketing investment in the form of offers for certain buyer segments and gather learnings

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Desired learnings at each phase

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• Understand buyer behaviour, adoption trends and validate product market fit

• Analyse incrementality, uplift and margins

• Marketing investments: test, learn, and modify

• Validate that we can manage risk while growing coverage into newer buyer segments

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Phase II (~Q4 24 / 2025+) -Calibrate strategy and begin accelerating

Refine strategy based on learnings (e.g. integration into eBay wallet, default option for certain refund scenarios, test promotional credits)

ccelerate use of marketing spend / offers in high performing channels & campaigns with greatest ROI based on learnings from the initial phase

xpand offering to newer markets and establish roadmap for international growth including UK & EU

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Desired learnings at each phase

• Understand if/how the initial CX impacts adoption

• Understand marketing and buyer segment / type of refund segment effectiveness (program growth and margins) 

• Assess international expansion opportunity

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Phase III (2026+) -Accelerate growth in a sustainable manner

Create more relevant and magical customer experiences by using store credit as a lever for building brand loyalty and increasing customer retention  (explore usecases around using credit to swap items, points-based credit system)

Expand business internationally with focus on UK, EU and other international markets

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Business Opportunity for Store Credit – iGMV of $40M-$60M and COP Savings of $2M - $3M in 2025 

We will validate key business and customer metrics as we execute on our strategy

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In summary…
What are the opportunities for eBay?

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eBay should implement the store credit function because:

• It boosts buyer consideration.

• It has the potential to recapture up to 12% of return Gross Merchandise Value (GMB).

The product strategy should incorporate the following:

• Pair it with a guided replacement flow.

• Highlight the better / improved pricing.

• Offer it as soon as the buyer initiates the return.

• Consider a targeted rollout, beginning with those who've had negative buyer experiences.

• Continue to have the classic return flow available. 

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eBay issues refunds usually within 3-5 business days to original FOP

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