Seller Cancellation Policy
Cancellations can be initiated by buyer, sellers and Lazada. This policy governs the cancellation process initiated by sellers. Cancellations lead to unhappy customer experience. Hence, all sellers are measured on the metric – Seller Fault Cancellation Rate.
What is Seller Fault Cancellation?
Cancellation Rate (CR) is an important metric for sellers where their performance will be measured and a high cancellation rate may result in account restrictions.
These are the cancellation scenarios that will be counted towards Seller Fault Cancellation:
- Cancellations initiated by seller
Calculation Rate = Total Number of Seller-Fault Cancelled Items/ Total Number of Ordered Items.
The metric is measured over a period of 28 days and is refreshed daily. The rolling 28 days period include orders created 8 days ago to orders created 35 days ago. (i.e. D-8 to D-35, given that D= today's date). The one week buffer is intentional to exclude orders within the last 7 days which might not have completed their fulfilment journey and thus, should not be taken into consideration.
Orders fulfilled within the agreed SOT SLA means orders were dropped off and handed over to 3pl and captured with TTS and/or Shipped scans.
Example: Cancellation Rate shown in Seller Center on 11 Dec 2020 takes into account the cancellation rate for orders created between 6 Nov 2020 to 3 Dec 2020.
What are the consequences of high Cancellation Rate (CR)?
Sellers identified with high Cancellation Rate (CR) may be subjected to following consequences:
- Order Volume Limit (OVL) is where the number of orders a seller can receive is limited for a period of 2 weeks when the cancellation rate is > 10%*
2) Ineligible to participate in Campaigns
- Sellers with high Cancellation Rate may not be eligible to take part in campaigns. Please refer to the Campaign Policy for more details.
3) Ineligible to sign up as a LazMall Seller
*Cancellation Rate (CR) thresholds will be revised periodically. Please always refer to Lazada Seller Policies for the latest CR thresholds.
- Sellers with cancellation rate > 2%* will not be able to sign up for LazMall.
4) Product Listing may be deactivated
- We monitor the Cancellation Rate closely and actions may be taken on accounts with high and/or increasing Cancellation Rates. Product listings with high Cancellation Rates may be deactivated. Sellers will need to update the stock level for the product listing accurately to prevent future seller fault cancellation before reactivating the product listing again.
5) Products with high number of items cancelled and Product Level Seller Fault Cancellation Rate may result in the products being deprioritize in the buyers’ search results (“Traffic Limitations”).
- Product Level Seller Fault Cancellation Rate is the number of times a product is cancelled arising from Seller Fault Cancellation compared to the total number of orders received for that product. The Product Level Cancellation Period covers orders created 8 days ago to orders created 14 days ago (i.e. D-8 to D-14, with D being today). For example, Product Level Seller Fault Cancellation Rate calculated on 11 December 2020 takes into consideration the orders cancelled and from 27 November 2020 to 3 December 2020
- The thresholds for number of items cancelled and Product Level Seller Cancellation Rate are monitored on a daily basis, and the corresponding enforcement action will also be determined on a daily basis. A seller with Product Level Seller Fault Cancellation Rate more than or equal to 10% and has 5 or more items cancelled in a week will be subject to Traffic Limitations.
Tips on how to avoid cancellations
Tip 1: Sellers must always process orders from oldest to most recent
a) Sort pending orders by aging before processing
b) Ensure orders are printed, picked and packed from oldest to newest
c) Always handover the oldest orders to the 3PL first
Tip 2: Sellers are always advised to co-locate the item storage area, packing area, document printing area and handover area
a) Co-locate the item inbound, document printing, item storage, item packing and item outbound processes if possible
b) If seller must operate from different locations, then enable multiple access to Seller Center and practice fulfillment from the different locations; Drop off the item at the nearest 3PL branch
c) Converge top selling SKUs into one location , and only list a minimal quantity of slow moving SKUs
d) Avoid printing in one location processing in another; This will cause unnecessary risks and delays
Tip 3: Start the day by attending to Lazada orders
a) Move packed inventory to outbound area on time
b) If you have high order volume, schedule a fixed time to pick, pack and RTS
c) Always ensure you have sufficient resources to process all orders in a day
d) Assign specific people to specific tasks; But make sure that they are cross-trained
e) Monitor email and SMS regularly for new order alerts
f) Use Lazada Seller Center app to monitor your orders
Tip 4: Leverage Holiday Mode
a) If you are not around and have no one to cover your operation, put your shop in Holiday Mode 1 week prior to ensure all parcels can be shipped on time to your customers
b) If you receive too many orders and you do not have enough resources to process the orders in time, do not hesitate to temporarily set your shop to Holiday Mode
