Mercari To Pilot Fashion Exchange Program In July - Will Generous Return Policy Boost GMV?
Mercari US is piloting a Fashion Exchange program, giving buyers more flexibility to return clothing items with oddly specific reasons for fit and smell in hopes of kicking off Q3 with a GMV boost.
We're excited to pilot our new Fashion Exchange program for the month of July!
This program is designed to make buying and selling pre-loved fashion on Mercari even better. Now you will be able to try on the item and if it doesn’t fit, you can exchange it for a Mercari credit.
Sellers will receive payment as usual; the exchange program will not affect their earnings.
Currently, buyers can only return items under the standard Mercari return policy if the item is different than described in the listing - but "remorse returns" for things like clothing that doesn't fit are not allowed.
Starting July 1-July 30th, Mercari will be allowing those remorse returns for certain clothing items under $100, with returns being covered under this Fashion Exchange pilot program going directly back to Mercari while sellers retain their original sales proceeds.
How It Works:
Eligible Women's, Men's, and Kids' clothing items (up to $100) are clearly labeled with a Fashion Exchange banner on the Item Detail Page and at checkout - see full list of categories here.
Return requests for "not as described" are still the responsibility of the seller and will be handled under the standard return process - but for Fashion Exchange eligible clothing items, buyers will also have the option to choose to return items for fit or smell issues.
If an item is returned under the Fashion Exchange program, it will go to Mercari not the seller, and the buyer will receive a credit to be used toward a future purchase on the site, not a refund to the original form of payment - but watch out, that credit will expire 30 days after it's applied to your account!
Which return reasons are covered under the Fashion Exchange program?
The Fashion Exchange program allows you to exchange your order for fit or smell issues. You are still covered with our Return Policy.How to request an exchange?
You still have 3 days from the delivery date to contact Mercari to request an exchange. Simply tell us why you’re requesting to exchange your item and include photos of the packaging, label and the item(s).
- Go to your order from the app or website and request a return.
- We will email you a return label to ship the item to Mercari.
- You will have 3 business days to drop off the package to UPS or UPS Access Point.
- Once we confirmed the return order, a credit will applied to your account.
- You will be reimbursed in credit for the item price, shipping, buyer protection fee, buyer paid shipping and the applicable sales tax.
Partial exchanges are not allowed and bundled orders can only be exchanged if the entire order qualifies for Fashion Exchange.
Buyers and sellers are encouraged to read the full ToS to understand potential limitations and restrictions of the program.
Mercari had previously tried expanding the return policy to include remorse return reasons as part of the major fee structure overhaul they announced in early 2024, but they were forced to quickly abandon the return changes after seller outcry and eventually reversed course on the fee structure changes as well.
Liz Morton
The Fashion Exchange concept may be more well received, due to the fact that it is Mercari, not sellers, who will be shouldering the financial burden of these returns - for now at least.
It's unclear what exactly Mercari will be doing with the items they receive as returns, though the most likely scenario is the may be sold to a third party liquidator for resale, similar to how eBay's International Shipping program handles returns.
While this pilot program appears to be at least an initial win/win for buyers and sellers, some have raised concerns that it could lead to increased buyer expectations for remorse returns in other categories and/or beyond that one month limited Fashion Exchange offer.
So why would Mercari take on the expense and complexity of dealing with these returns? The answer could lie in their ongoing struggles to boost GMV (Gross Merchandise Volume) on the US site.
Liz Morton
2024 was a tumultuous year for Mercari US, with the fee structure debacle, lagging sales and active buyers, a mass layoff of ~45% of US staff, and a CEO shakeup.
With Mercari Japan CEO Shintaro Yamada taking over leadership of the US market as well, the company is looking to turn things around, with a specific eye toward GMV growth, but has struggled to win back lost buyers and turned to frequent flash sales and other discount events to try to stimulate sales activity.
Unfortunately, as rival marketplaces like eBay have found, frequent discounting like this is a double edged sword - once buyers get used to receiving discounts, they'll often wait for a sale before making a purchase, creating "one and done" or only occasional buying patterns.
Flash sales can also be counterproductive because GMV is reported as the total amount of the sale (which would be the discounted price), so in order to see actual growth, you have to hope the lower prices spur enough additional sales to not just make up the difference but exceed what the numbers would have been at full price.
Offering a more buyer-friendly return policy, especially in a high returns category like clothing, could help boost buyer confidence and lead to more sales without the downsides of discounting.
Add to that the fact that any returns under this Exchange Program will result in a site credit that must be used within 30 days, thus ensuring a high likelihood of an additional order to be counted in Q3 GMV, and it's not difficult to see the possible benefits to Mercari - at least in the short term.
What do you think of Mercari's Fashion Exchange pilot and would you be in favor of them extending it past July? Let us know in the comments below!
