Business
Pinduoduo Reimburses Sellers’ Service Fees Following PDD’s $1.4B Fee Waiver Pledge amid Cancellation Discontent
Pinduoduo is refunding some service charges to merchants following a commitment by parent company PDD to waive US$1.4 billion. Vendors were unhappy because service charges were not returned even when orders were cancelled by customers.
Pinduoduo, a Chinese low-cost online retail platform owned by PDD Holdings, is providing some reimbursements of service costs to its merchants. This follows a pledge by the company's management to eliminate 10 billion yuan (US$1.4 billion) in fees.
The primary dispute originated from what are termed as technical service charges, essentially sales commissions that Pinduoduo levies on vendors for utilizing their platform. The vendors were unhappy because these charges were not returned even when a customer cancelled a purchase and asked for their money back.
Following a recent revision in policy, Pinduoduo has started refunding service fees to vendors who participated in select promotional campaigns, according to reports. The platform has also modified its fee structure, ensuring that sellers are billed at the same rates regardless of whether a customer chose to pay upfront or selected the "buy now, pay later" option.
Chinese media platform, Ebrun, was the first to break the news about the move. Pinduoduo has yet to respond to the request for comments made on Friday.
During a post-earnings conference call last week, Chen Lei, the co-CEO and chairman of PDD, announced that the company plans to forgo 10 billion yuan in transaction charges for top-tier merchants in the coming year. He stated that the company is ready to endure temporary losses and accept a decrease in profits.
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